Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Sep. 10, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | Rennova Health, Inc. | ||
Entity Central Index Key | 0000931059 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,941,747 | ||
Entity Common Stock, Shares Outstanding | 7,508,936,775 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 6,870 | |
Accounts receivable, net | 3,811,749 | 971,312 |
Inventory | 453,402 | 236,914 |
Prepaid expenses and other current assets | 78,820 | 9,842 |
Income tax refunds receivable | 631,077 | 1,940,845 |
Current assets of AMSG and HTS classified as held for sale | 140,352 | 226,732 |
Total current assets | 5,122,270 | 3,385,645 |
Property and equipment, net | 8,526,904 | 2,695,440 |
Intangibles, net | 259,443 | |
Deposits | 278,864 | 180,875 |
Non-current assets of AMSG and HTS classified as held for sale | 11,819 | 28,834 |
Total assets | 14,199,300 | 6,290,794 |
Current liabilities: | ||
Accounts payable (includes related parties amount of $0.4 and $0.2 million, respectively) | 8,155,955 | 4,179,336 |
Checks issued in excess of bank balance | 109,695 | 9,342 |
Accrued expenses (includes related parties amount of $0.3 and $0.1 million, respectively) | 10,711,281 | 4,967,405 |
Income taxes payable | 1,400,651 | 1,971,592 |
Current portion of notes payable | 7,083,505 | 6,957,830 |
Current portion of notes payable, related parties | 800,000 | 1,128,500 |
Current portion of capital lease obligations | 730,665 | 2,079,137 |
Current portion of debentures | 12,776,316 | 1,615,693 |
Derivative liabilities | 350,260 | 12,435,250 |
Current liabilities of AMSG and HTS classified as held for sale | 2,297,846 | 1,972,854 |
Total current liabilities | 44,416,174 | 37,316,939 |
Other liabilities: | ||
Debentures, net of current portion | 3,752,022 | |
Capital lease obligations, net of current portion | 31,543 | |
Total liabilities | 44,447,717 | 41,068,961 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Common stock, $0.0001 par value, 10,000,000,000 shares authorized, 128,567,273 and 39,502 shares issued and outstanding | 12,857 | 4 |
Additional paid-in-capital | 375,845,883 | 128,549,458 |
Accumulated deficit | (415,046,606) | (169,180,425) |
Total stockholders' deficit | (39,167,864) | (40,613,461) |
Total liabilities and stockholders' deficit | 14,199,300 | 6,290,794 |
Redeemable Preferred Stock I-1 [Member] | ||
Other liabilities: | ||
Redeemable Preferred Stock | 5,835,294 | 5,835,294 |
Redeemable Preferred Stock I-2 [Member] | ||
Other liabilities: | ||
Redeemable Preferred Stock | 3,084,153 | |
Series G Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | 2 | 2 |
Total stockholders' deficit | 2 | 2 |
Series H Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | ||
Series F Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | 17,500 | 17,500 |
Total stockholders' deficit | 17,500 | 17,500 |
Series J Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | 2,500 | |
Total stockholders' deficit | $ 2,500 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts payable related parties | $ 400,000 | $ 200,000 |
Accrued expenses related parties | $ 300,000 | $ 100,000 |
Preferred stock par value | $ 0.01 | |
Preferred stock shares authorized | 5,000,000 | |
Common stock par value | $ 0.0001 | $ 0.0001 |
Common stock shares authorized | 10,000,000,000 | 10,000,000,000 |
Common stock shares issued | 128,567,273 | 39,502 |
Common stock shares outstanding | 128,567,273 | 39,502 |
Series G Preferred Stock [Member] | ||
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 14,000 | 14,000 |
Preferred stock shares issued | 215 | 215 |
Preferred stock shares outstanding | 215 | 215 |
Series H Preferred Stock [Member] | ||
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 14,202 | 14,202 |
Preferred stock shares issued | 10 | 60 |
Preferred stock shares outstanding | 10 | 60 |
Series F Preferred Stock [Member] | ||
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 1,750,000 | 1,750,000 |
Preferred stock shares issued | 1,750,000 | 1,750,000 |
Preferred stock shares outstanding | 1,750,000 | 1,750,000 |
Series J Preferred Stock [Member] | ||
Preferred stock par value | $ .01 | $ .01 |
Preferred stock shares authorized | 250,000 | 250,000 |
Preferred stock shares issued | 250,000 | 0 |
Preferred stock shares outstanding | 250,000 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Net revenues | $ 14,548,690 | $ 3,088,216 |
Operating expenses: | ||
Direct costs of revenue | 11,509,507 | 948,838 |
General and administrative | 14,821,606 | 15,757,527 |
Sales and marketing expenses | 4,554 | 742,637 |
Asset impairment | 173,799 | |
Depreciation and amortization | 1,263,844 | 1,715,321 |
Total operating expenses | 27,773,310 | 19,164,323 |
Loss from continuing operations before other income (expense) and income taxes | (13,224,620) | (16,076,107) |
Other income (expense): | ||
Other income | 672,972 | 38,342 |
Gain on bargain purchase | 7,566,670 | |
Change in fair value of derivative instruments | 13,696,214 | (42,702,815) |
Gain on extinguishment of debt | 42,702,815 | |
Value of convertible liabilities | (12,435,250) | |
Interest expense | (21,532,678) | (21,432,285) |
Total other income (expense), net | 403,178 | (33,829,193) |
Net loss from continuing operations before income taxes | (12,821,442) | (49,905,300) |
Provision for income taxes | 766,070 | 1,015,724 |
Net loss from continuing operations | (13,587,512) | (50,921,024) |
Net loss from discontinued operations | (434,843) | (4,276,918) |
Net loss | (14,022,355) | (55,197,942) |
Deemed dividend from trigger of down round provision feature | (231,843,826) | (53,341,619) |
Net loss to common shareholders | $ (245,866,181) | $ (108,539,561) |
Net loss per common share: | ||
Basic and diluted: continuing operations | $ (24.49) | $ (22,587.23) |
Basic and diluted: discontinued operations | (0.04) | (926.54) |
Total Basic and diluted | $ (24.53) | $ (23,513.77) |
Weighted average number of common shares outstanding during the period: | ||
Basic and diluted | 10,022,180 | 4,616 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Deficit - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2016 | $ 102 | $ 45,754,866 | $ (60,640,864) | $ (14,885,896) | |
Balance, shares at Dec. 31, 2016 | 10,234 | 373 | |||
Conversion of preferred stock into common stock | $ (78) | 78 | |||
Conversion of preferred stock into common stock, shares | (7,785) | 742 | |||
Preferred stock issued for business acquisition | $ 17,500 | 156,597 | 174,097 | ||
Preferred stock issued for business acquisition, shares | 1,750,000 | ||||
Common stock issued in exchange for warrants | 697,485 | 697,485 | |||
Common stock issued in exchange for warrants, shares | 1,330 | ||||
Shares issued in settlement of notes payable and warrants | 440,000 | 440,000 | |||
Shares issued in settlement of notes payable and warrants, shares | 53 | ||||
Exchange of preferred stock for convertible debentures | $ (22) | (2,173,978) | (2,174,000) | ||
Exchange of preferred stock for convertible debentures, shares | (2,174) | ||||
Conversion of debentures into common stock | $ 4 | 7,306,310 | 7,306,314 | ||
Conversion of debentures into common stock, shares | 36,571 | ||||
Rounding up of common shares in connection with reverse stock split | |||||
Rounding up of common shares in connection with reverse stock split, shares | 1 | ||||
Reduction in common stock in connection with reverse stock split | (6,675) | (6,675) | |||
Reduction in common stock in connection with reverse stock split, shares | (5) | ||||
Common stock granted to employees | |||||
Discount on convertible debentures | 252,143 | 252,143 | |||
Warrants and beneficial conversion features related to the issuance of convertible notes | 24,177,258 | 24,177,258 | |||
Stock-based compensation | 58,278 | 58,278 | |||
Deemed dividend from trigger of down round provision feature | 53,341,619 | (53,341,619) | |||
Restricted stock issued to employees | 244,768 | 244,768 | |||
Restricted stock issued to employees, shares | 364 | ||||
Common stock issued for services and severance | 161,003 | 161,003 | |||
Common stock issued for services and severance, shares | 83 | ||||
Shares returned to treasury | |||||
Shares returned to treasury, shares | (10) | ||||
Beneficial conversion feature of Series 1-1 preferred stock | (1,860,294) | (1,860,294) | |||
Conversion of Series I-2 Preferred stock into common stock | |||||
Net loss | (55,197,942) | (55,197,942) | |||
Balance at Dec. 31, 2017 | $ 17,502 | $ 4 | 128,549,458 | (169,180,425) | (40,613,461) |
Balance, shares at Dec. 31, 2017 | 1,750,275 | 39,502 | |||
Conversion of debentures into common stock | $ 422 | 8,127,622 | 8,128,044 | ||
Conversion of debentures into common stock, shares | 4,221,601 | ||||
Stock-based compensation | 285,992 | 285,992 | |||
Deemed dividend from trigger of down round provision feature | 231,843,826 | (231,843,826) | |||
Restricted stock issued to employees | $ 14 | 477,919 | 477,933 | ||
Restricted stock issued to employees, shares | 142,667 | ||||
Shares returned to treasury | |||||
Shares returned to treasury, shares | (123) | ||||
Conversion of Series I-2 Preferred stock into common stock | $ 10,634 | 1,502,471 | 1,513,105 | ||
Conversion of Series I-2 Preferred stock into common stock, shares | 106,335,991 | ||||
Conversion of Series H Preferred stock into common stock | $ 4 | (4) | |||
Conversion of Series H Preferred stock into common stock, shares | (50) | 40,000 | |||
Common stock issued in cashless exercise of warrants | $ 1,779 | 4,617,371 | 4,619,150 | ||
Common stock issued in cashless exercise of warrants, shares | 17,788,579 | ||||
Shares issued in settlement of notes payable | $ 2,500 | 247,500 | 250,000 | ||
Shares issued in settlement of notes payable, shares | 250,000 | ||||
Exchange of convertible debentures for Series I-2 Preferred Stock | 1,420 | 1,420 | |||
Adjust for fractional shares in reverse stock split | |||||
Adjust for fractional shares in reverse stock split, shares | (944) | ||||
Beneficial conversion feature of convertible debentures | 192,308 | 192,308 | |||
Net loss | (14,022,355) | (14,022,355) | |||
Balance at Dec. 31, 2018 | $ 20,002 | $ 12,857 | $ 375,845,883 | $ (415,046,606) | $ (39,167,864) |
Balance, shares at Dec. 31, 2018 | 2,000,225 | 128,567,273 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows used in operating activities: | ||
Net loss from continuing operations | $ (13,587,512) | $ (50,921,024) |
Adjustments to reconcile net loss to net cash used in operations: | ||
Depreciation and amortization | 1,263,844 | 1,715,321 |
Non-cash gain on derivative instruments | (2,803) | |
Stock issued for services | 477,933 | 161,003 |
Stock-based compensation | 285,992 | 303,046 |
Non-cash interest expense | 8,649,232 | |
Amortization of debt discount | 17,558,008 | 10,412,324 |
Non-cash settlement of debt | (50,000) | |
Gain on extinguishment of debt | (42,702,815) | |
Change in fair value of derivative instruments | (13,696,214) | 42,702,815 |
Value of convertible liabilities | 12,435,250 | |
Gain on purchase of Jamestown Medical Center | (7,566,670) | |
Asset impairment | 173,799 | |
Gain on disposal of equipment under capital lease | (551,155) | |
Loss from discontinued operations | (434,843) | (4,276,918) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,840,437) | 80,033 |
Prepaid expenses and other current assets | 237,561 | 136,951 |
Inventory | 234,194 | (236,914) |
Security deposits | (94,143) | (45,728) |
Accounts payable and checks issued in excess of bank balance | 4,076,972 | 1,674,969 |
Accrued expenses | 6,416,725 | 1,245,165 |
Income tax assets and liabilities | 738,827 | 546,752 |
Net cash used in operating activities of continuing operations | (7,307,117) | (18,173,341) |
Net cash (used in) provided by operating activities of discontinued operations | (371,613) | 459,794 |
Net cash used in operating activities | (7,678,730) | (17,713,547) |
Cash flows provided by (used in) investing activities: | ||
Purchase of property and equipment | (213,105) | (1,422,002) |
Purchase of Jamestown Regional Medical Center | (634,721) | |
Proceeds from the sale of equipment under capital lease | 710,403 | |
Net cash used in investing activities of continuing operations | (137,423) | (1,422,002) |
Net cash provided by investing activities of discontinued operations | 800,000 | 929,465 |
Net cash provided by (used in) investing activities | 662,577 | (492,537) |
Cash flows (used in) provided by financing activities: | ||
Proceeds from issuance of common stock and warrants | 639,615 | |
Proceeds from issuance of Series I-1 Preferred Stock | 4,000,000 | |
Financing fees | (25,000) | |
Proceeds from issuance of related party notes payable and advances | 3,312,348 | 4,765,000 |
Proceeds from issuance of debentures | 9,000,000 | 15,742,500 |
Payments on related party notes payable and advances | (3,972,348) | (5,298,782) |
Payments on capital lease obligations | (1,316,929) | (1,680,747) |
Cash paid for fractional shares in connection with reverse stock split | (47) | (6,675) |
Net cash provided by financing activities of continuing operations | 7,023,024 | 18,135,911 |
Net cash provided by financing activities of discontinued operations | ||
Net cash provided by financing activities | 7,023,024 | 18,135,911 |
Net increase (decrease) in cash | 6,870 | (70,173) |
Cash at beginning of period | 70,173 | |
Cash at end of period | $ 6,870 |
Description of Business and Bas
Description of Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | Note 1 – Description of Business and Basis of Presentation Rennova Health, Inc., together with its subsidiaries (the “Company”), is a vertically integrated provider of healthcare related products and services. The Company’s principal lines of business are: (i) Hospital Operations; and (ii) Clinical Laboratory Operations. The Company presents its financial results based upon these two business segments. Merger between the Company and Medytox Solutions, Inc. On November 2, 2015, pursuant to the terms of the Agreement and Plan of Merger, dated as of April 15, 2015, by and among CollabRx, Inc. (“CollabRx”), CollabRx Merger Sub, Inc. (“Merger Sub”), a direct wholly-owned subsidiary of CollabRx formed for the purpose of the merger, and Medytox Solutions, Inc. (“Medytox”), Merger Sub merged with and into Medytox, with Medytox as the surviving company and a direct, wholly-owned subsidiary of CollabRx (the “Merger”). Prior to closing, the Company amended its certificate of incorporation to change its name to Rennova Health, Inc. This transaction was accounted for as a reverse merger in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and, as such, the historical financial statements of Medytox became the historical financial statements of the Company. Common Stock Listing On November 3, 2015, the common stock of Rennova Health, Inc. commenced trading on The NASDAQ Capital Market under the symbol “RNVA.” Prior to that date, our common stock was listed on The NASDAQ Capital Market under the symbol “CLRX.” On April 18, 2017, the Company was notified by NASDAQ that the stockholders’ equity balance reported on the Company’s Form 10-K for the year ended December 31, 2016 fell below the $2.5 million minimum requirement for continued listing under The NASDAQ Capital Market’s Listing Rule 5550(b)(1) (the “Rule”). In accordance with the Rule, the Company submitted a plan to NASDAQ outlining how it intended to regain compliance. On August 17, 2017, NASDAQ notified the Company that its plan to correct the stockholders’ equity deficiency did not contain sufficient evidence to support a correction being achieved in the required time frame. The Company appealed this decision to a Hearing Panel which, on October 23, 2017, maintained this position and denied the Company a continued listing. Effective October 25, 2017, the Company’s common stock (RNVA) and warrants to purchase common stock (RNVAW) were no longer listed on The NASDAQ Capital Market but began trading on the OTCQB instead. Reverse Stock Splits On February 7, 2017, the Company’s Board of Directors approved an amendment to the Company’s Certificate of Incorporation to effect a 1-for-30 reverse stock split of the Company’s shares of common stock effective February 22, 2017, on September 21, 2017, the Company’s Board of Directors approved an amendment to the Company’s Certificate of Incorporation to effect a 1-for-15 reverse stock split effective October 5, 2017, and on November 5, 2018, the Company’s Board of Directors approved an amendment to the Company’s Certificate of Incorporation to effect a 1-for-500 reverse stock split effective November 12, 2018 (the “Reverse Stock Splits”). The stockholders of the Company had approved these amendments to the Company’s Certificate of Incorporation on December 22, 2016 for the February 22, 2017 reverse stock split, on September 20, 2017 for the October 5, 2017 reverse stock split and on August 22, 2018 for the November 12, 2018 reverse stock split. In each of these cases, the Company’s stockholders had granted authorization to the Board of Directors to determine in its discretion the specific ratio, subject to limitations, and the timing of the reverse splits within certain specified effective dates. As a result of the Reverse Stock Splits, every 30 shares of the Company’s then outstanding common stock was combined and automatically converted into one share of the Company’s common stock on February 22, 2017, every 15 shares of the Company’s then outstanding common stock was combined and automatically converted into one share of the Company’s common stock on October 5, 2017 and every 500 shares of the Company’s common stock was combined and automatically converted into one share of the Company’s common stock on November 12, 2018. In addition, the conversion and exercise prices of all of the Company’s outstanding preferred stock, common stock purchase warrants, stock options, restricted stock, equity incentive plans and convertible notes payable were proportionately adjusted at the applicable reverse split ratio in accordance with the terms of such instruments. In addition, proportionate voting rights and other rights of common stockholders were not affected by the Reverse Stock Splits, other than as a result of the rounding up of fractional shares in the February reverse split and the payment of cash in lieu of fractional shares in the October and November reverse splits, as no fractional shares were issued in connection with the Reverse Stock Splits. All share, per share and capital stock amounts as of and for the years ended December 31, 2018 and 2017 have been restated to give effect to the Reverse Stock Splits. In addition, on September 18, 2018, the Company amended its Certificate of Incorporation to have the authority to issue 10,000,000,000 shares of common stock and the par value of the Company’s common stock was decreased from $0.01 per share to $.0001 per share. No additional change was made to the terms of the Company’s common stock as a result of the November 12, 2018 reverse stock split and no change was made to the authorized preferred stock, which remains at 5,000,000 shares of preferred stock, par value $0.01 per share. Going Concern Under Accounting Standards Update (“ASU”), 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40) Accounting Standards Codification 205-40 (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. As required by ASC 205-40, this evaluation shall initially not take into consideration the potential mitigating effects of plans that have not been fully implemented as of the date the financial statements are issued. Management has assessed the Company’s ability to continue as a going concern in accordance with the requirement of ASC 205-40. As reflected in the consolidated financial statements, the Company had a working capital deficit and an accumulated deficit of $39.3 million and $39.2 million, respectively, at December 31, 2018. In addition, the Company had a loss from continuing operations of approximately $13.6 million and cash used in operating activities of $7.3 million for the year ended December 31, 2018. The Company recorded income from the change in fair value of derivative instruments in the amount of approximately $13.7 million in 2018 compared to a loss from the value of convertible liabilities of $12.4 million in 2017. We also realized a gain on bargain purchase associated with the acquisition of Jamestown Regional Medical Center in June 2018 in the amount of $7.6 million, which is more fully discussed in Note 6. The continued losses and other related factors raise substantial doubt about the Company’s ability to continue as a going concern for twelve months from the filing date of this report. The Company’s consolidated financial statements are prepared assuming the Company can continue as a going concern, which contemplates continuity of operations through realization of assets, and the settling of liabilities in the normal course of business. Initial cost savings were realized by reducing the number of laboratory facilities to one for most of its toxicology diagnostics, thereby reducing the number of employees and associated operating expenses. The Company plans to spin off its Advanced Molecular Services Group (“AMSG”) and Health Technology Solutions, Inc. (“HTS”), as independent publicly traded companies by way of tax-free distributions to its shareholders. Completion of these spin offs is now expected to occur during the first quarter of 2020. The spin offs are subject to numerous conditions, including effectiveness of Registration Statements on Form 10 to be filed with the Securities and Exchange Commission and consents, including under various funding agreements previously entered by the Company. The intent of the spin offs of AMSG and HTS is to create three public companies, each of which can focus on its own strengths and operational plans. In accordance with ASC 205-20 and having met the criteria for “held for sale”, the Company has reflected amounts relating to AMSG and HTS as disposal groups classified as held for sale and included as part of discontinued operations. AMSG and HTS are no longer included in the segment reporting following the reclassification to discontinued operations. The discontinued operations of AMSG and HTS are described further in Note 18. The Company’s core business is now rural hospitals which is a specialized marketplace with a requirement for capable and knowledgeable management. The Company’s current financial condition may make it difficult to attract and maintain adequate expertise in its management team to successfully operate the Company’s hospitals. There can be no assurance that the Company will be able to achieve its business plan, which is to acquire and operate clusters of rural hospitals, raise any additional capital or secure the additional financing necessary to implement its current operating plan. The ability of the Company to continue as a going concern is dependent upon its ability to significantly reduce its operating costs, increase its revenues, and eventually regain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Basis of Presentation and Consolidation The consolidated financial statements have been prepared in accordance with U.S. GAAP and in accordance with Regulation S-X of the SEC. The consolidated financial statements include the accounts of Rennova Health, Inc. and its wholly-owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. Reclassifications The Company has reclassified certain amounts in the 2017 consolidated financial statements to be consistent with the 2018 presentation. These principally relate to reclassification of bad debt, which is now presented as a reduction of revenue, as well as the balance sheet classification of derivative liabilities. The reclassifications had no impact on operations or cash flows for the year ended December 31, 2017. Comprehensive Loss During the years ended December 31, 2018 and 2017, comprehensive loss was equal to the net loss amounts presented in the accompanying consolidated statements of operations. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions include the estimates of fair values of assets acquired and liabilities assumed in business combinations, including hospital acquisitions, reserves and write-downs related to receivables and inventories, the recoverability of long-lived assets, stock based compensation, the valuation allowance relating to the Company’s deferred tax assets, valuation of equity and derivative instruments, deemed dividends and debt discounts, among others. Actual results could differ from those estimates and would impact future results of operations and cash flows. Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. The Company had minimal cash equivalents at December 31, 2018 and 2017. Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “ Revenue from Contracts with Customers (Topic 606),” Hospital Operations Our revenues generally relate to contracts with patients in which our performance obligations are to provide health care services to the patients. Revenues are recorded during the period our obligations to provide health care services are satisfied. Our performance obligations for inpatient services are generally satisfied over periods that average approximately five days, and revenues are recognized based on charges incurred in relation to total expected charges. Our performance obligations for outpatient services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges. Medicare generally pays for inpatient and outpatient services at prospectively determined rates based on clinical, diagnostic and other factors. Services provided to patients having Medicaid coverage are generally paid at prospectively determined rates per discharge, per identified service or per covered member. Agreements with commercial insurance carriers, managed care and preferred provider organizations generally provide for payments based upon predetermined rates per diagnosis, per diem rates or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals. Our revenues are based upon the estimated amounts we expect to be entitled to receive from patients and third-party payers. Estimates of contractual allowances under managed care and commercial insurance plans are based upon the payment terms specified in the related contractual agreements. Revenues related to uninsured patients and uninsured copayment and deductible amounts for patients who have health care coverage may have discounts applied (uninsured discounts and contractual discounts). We also record estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record self-pay revenues at the estimated amounts we expect to collect. Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation. Estimated reimbursement amounts are adjusted in subsequent periods as cost reports are prepared and filed and as final settlements are determined (in relation to certain government programs, primarily Medicare, this is generally referred to as the “cost report” filing and settlement process). There were no adjustments to estimated Medicare and Medicaid reimbursement amounts and disproportionate-share funds related primarily to cost reports filed during 2018 and 2017. The Emergency Medical Treatment and Labor Act (“EMTALA”) requires any hospital participating in the Medicare program to conduct an appropriate medical screening examination of every person who presents to the hospital’s emergency room for treatment and, if the individual is suffering from an emergency medical condition, to either stabilize the condition or make an appropriate transfer of the individual to a facility able to handle the condition. The obligation to screen and stabilize emergency medical conditions exists regardless of an individual’s ability to pay for treatment. Federal and state laws and regulations require, and our commitment to providing quality patient care encourages, us to provide services to patients who are financially unable to pay for the health care services they receive. The federal poverty level is established by the federal government and is based on income and family size. The Company considers the poverty level in determining whether patients qualify for free or reduced cost of care. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in revenues. We provide discounts to uninsured patients who do not qualify for Medicaid or charity care. In implementing the uninsured discount policy, we may first attempt to provide assistance to uninsured patients to help determine whether they may qualify for Medicaid, other federal or state assistance, or charity care. If an uninsured patient does not qualify for these programs, the uninsured discount is applied. The collection of outstanding receivables for Medicare, Medicaid, managed care payers, other third-party payers and patients is our primary source of cash and is critical to our operating performance. The primary collection risks relate to uninsured patient accounts, including patient accounts for which the primary insurance carrier has paid the amounts covered by the applicable agreement, but patient responsibility amounts (deductibles and copayments) remain outstanding. Implicit price concessions relate primarily to amounts due directly from patients. Estimated implicit price concessions are recorded for all uninsured accounts, regardless of the aging of those accounts. Accounts are written off when all reasonable internal and external collection efforts have been performed. The estimates for implicit price concessions are based upon management’s assessment of historical write offs and expected net collections, business and economic conditions, trends in federal, state and private employer health care coverage and other collection indicators. Management relies on the results of detailed reviews of historical write-off’s and collections at facilities that represent a majority of our revenues and accounts receivable (the “hindsight analysis”) as a primary source of information in estimating the collectability of our accounts receivable. We perform the hindsight analysis quarterly, utilizing rolling twelve-months accounts receivable collection and write off data. We believe our quarterly updates to the estimated contractual allowance amounts at each of our hospital facilities provide reasonable estimates of our revenues and valuations of our accounts receivable. At December 31, 2018 and 2017, estimated contractual allowances of $63 million and $7.0 million, respectively, had been recorded as reductions to our accounts receivable balances to enable us to record our revenues and accounts receivable at the estimated amounts we expect to collect. To quantify the total impact of the trends related to uninsured accounts, we believe it is beneficial to view total uncompensated care, which is comprised of charity care, uninsured discounts and implicit price concessions. Total uncompensated care as a percentage of gross revenues was 11% and 18% for the years ended December 31, 2018 and 2017, respectively. Clinical Laboratory Operations. Laboratory testing services include chemical diagnostic tests such as blood analysis and urine analysis. Laboratory service revenues are recognized at the time the testing services are performed and billed and are reported at their estimated net realizable amounts. Net service revenues are determined utilizing gross service revenues net of contractual adjustments and discounts. Even though it is the responsibility of the patient to pay for laboratory service bills, most individuals in the U.S. have an agreement with a third-party payer such as a commercial insurance provider, Medicaid or Medicare to pay all or a portion of their healthcare expenses; most of the services provided by us are to patients covered under a third-party payer contract. In most cases, the Company is provided the third-party billing information and seeks payment from the third party in accordance with the terms and conditions of the third-party payer for health service providers like us. Each of these third-party payers may differ not only in terms of rates, but also with respect to terms and conditions of payment and providing coverage (reimbursement) for specific tests. Estimated revenues are established based on a series of procedures and judgments that require industry specific healthcare experience and an understanding of payer methods and trends. Despite follow up billing efforts, the Company does not currently anticipate collection of a significant portion of self-pay billings, including the patient responsibility portion of the billing for patients covered by third party payers. The Company currently does not have any capitated agreements. In applying the new revenue standard, (“ASU”) 2014-09, “ Revenue from Contracts with Customers (Topic 606), We review our calculations for the realizability of gross service revenues monthly to make certain that we are properly allowing for the uncollectable portion of our gross billings and that our estimates remain sensitive to variances and changes within our payer groups. The contractual allowance calculation is made based on historical allowance rates for the various specific payer groups monthly with a greater weight being given to the most recent trends; this process is adjusted based on recent changes in underlying contract provisions. This calculation is routinely analyzed by us based on actual allowances issued by payers and the actual payments made to determine what adjustments, if any, are needed. Total gross revenues for Hospital and Clinical Laboratory Operations were reduced by approximately $9.4 million and $1.5 million for bad debt for the years ended December 31, 2018 and 2017, respectively. As required by the new standard, after bad debt and contractual and related allowance adjustments to revenues of $73.5 million and $20.9 million, for the years ended December 31, 2018 and 2017, respectively, we reported net revenues of $14.5 million and $3.1 million. We continue to review the provision for bad debt and contractual and related allowances. Contractual Allowances and Doubtful Accounts Policy Accounts receivable are reported at realizable value, net of allowances for credits and doubtful accounts, which are estimated and recorded in the period the related revenue is recorded. The Company has a standardized approach to estimating and reviewing the collectability of its receivables based on a number of factors, including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation process related to allowances for contractual credits and doubtful accounts. In addition, the Company regularly assesses the state of its billing operations in order to identify issues which may impact the collectability of these receivables or reserve estimates. Receivables deemed to be uncollectible are charged against the allowance for doubtful accounts at the time such receivables are written-off. Recoveries of receivables previously written-off are recorded as credits to the allowance for doubtful accounts. Revisions to the allowances for doubtful accounts estimates are recorded as an adjustment to provision for bad debts. See Note 4 – Accounts Receivable. Impairment or Disposal of Long-Lived Assets The Company accounts for the impairment or disposal of long-lived assets according to the FASB ASC Topic 360, Property, Plant and Equipment Derivative Financial Instruments and Fair Value, Including the Adoption of ASU 2017-11 We account for warrants issued in conjunction with the issuance of common stock and certain convertible debt instruments in accordance with the guidance contained in ASC Topic 815, Derivatives and Hedging Distinguishing Liabilities from Equity In July 2017, the FASB issued ASU 2017-11 “Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815).” The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. Under current GAAP, an equity-linked financial instrument with a down round feature that otherwise is not required to be classified as a liability under the guidance in Topic 480 is evaluated under the guidance in Topic 815, Derivatives and Hedging, to determine whether it meets the definition of a derivative. If it meets that definition, the instrument (or embedded feature) is evaluated to determine whether it is indexed to an entity’s own stock as part of the analysis of whether it qualifies for a scope exception from derivative accounting. Generally, for warrants and conversion options embedded in financial instruments that are deemed to have a debt host (assuming the underlying shares are readily convertible to cash or the contract provides for net settlement such that the embedded conversion option meets the definition of a derivative), the existence of a down round feature results in an instrument not being considered indexed to an entity’s own stock. This results in a reporting entity being required to classify the freestanding financial instrument or the bifurcated conversion option as a liability, which the entity must measure at fair value initially and at each subsequent reporting date. The amendments in this Update revise the guidance for instruments with down round features in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception from derivative accounting. An entity still is required to determine whether instruments would be classified in equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do qualify, freestanding instruments with down round features are no longer classified as liabilities and embedded conversion options with down round features are no longer bifurcated. For entities that present EPS in accordance with Topic 260, and when the down round feature is included in an equity-classified freestanding financial instrument, the value of the effect of the down round feature is treated as a dividend when it is triggered and as a numerator adjustment in the basic EPS calculation. This reflects the occurrence of an economic transfer of value to the holder of the instrument, while alleviating the complexity and income statement volatility associated with fair value measurement on an ongoing basis. Convertible instruments are unaffected by the Topic 260 amendments in this Update. Those amendments in Part I of this Update are a cost savings relative to current GAAP. This is because, assuming the required criteria for equity classification in Subtopic 815-40 are met, an entity that issued such an instrument no longer measures the instrument at fair value at each reporting period (in the case of warrants) or separately accounts for a bifurcated derivative (in the case of convertible instruments) on the basis of the existence of a down round feature. For convertible instruments with embedded conversion options that have down round features, applying specialized guidance such as the model for contingent beneficial conversion features rather than bifurcating an embedded derivative also reduces cost and complexity. Under that specialized guidance, the issuer recognizes the intrinsic value of the feature only when the feature becomes beneficial instead of bifurcating the conversion option and measuring it at fair value each reporting period. The amendments in Part II of this Update replace the indefinite deferral of certain guidance in Topic 480 with a scope exception. This has the benefit of improving the readability of the Codification and reducing the complexity associated with navigating the guidance in Topic 480. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part 1 of this Update should be applied in either of the following ways: 1. Retrospectively to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective; or 2. Retrospectively to outstanding financial instruments with a down round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company has determined that this amendment had a material impact on its consolidated financial statements and has early adopted this accounting standard update. The cumulative effect of the adoption of ASU 2017-11 resulted in the reclassification of the derivative liability recorded of $56 million and the reversal of $41 million of interest expense recorded in the Company’s first fiscal quarter of 2017. The remaining $15 million was offset to additional paid in capital (discount on convertible debenture). Additionally, the Company recognized a deemed dividend from the trigger of the down round provision feature of $53.3 million. A $51 million deemed dividend was recorded retrospectively as of the beginning of the issuance of the debentures issued in March 2017 where the initial derivative liability was recorded as a result of the down round provision feature. A deemed dividend of $231.8 million was recorded during 2018 as a result of down round provision features. See Note 11 for an additional discussion of derivative financial instruments. Stock Based Compensation The Company accounts for Stock-Based Compensation under ASC 718 “ Compensation – Stock Compensation The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, “ Equity-Based Payments to Non-Employees The Company issues stock to consultants for various services. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete. The Company recognizes consulting expense and a corresponding increase to additional paid-in-capital related to stock issued for services. Income Taxes Income taxes are accounted for under the liability method of accounting for income taxes. Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled. The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs. Future income tax assets are recognized to the extent that they are considered more likely than not to be realized. When projected future taxable income is insufficient to provide for the realization of deferred tax assets, the Company recognizes a valuation allowance (see Note 15). In accordance with U.S. GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Derecognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets. Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of December 31, 2018 and 2017. Earnings (Loss) Per Share The Company reports earnings (loss) per share in accordance with ASC Topic 260, “Earnings Per Share,” which establishes standards for computing and presenting earnings per share. Basic earnings (loss) per share of common stock is calculated by dividing net earnings (loss) allocable to common shareholders by the weighted-average shares of common stock outstanding during the period, without consideration of common stock equivalents. Diluted earnings (loss) per share is calculated by adjusting the weighted-average shares of common stock outstanding for the dilutive effect of common stock equivalents, including stock options and warrants outstanding for the period as determined using the treasury stock method. For purposes of the diluted net loss per share calculation, common stock equivalents are excluded from the calculation when their effect would be anti-dilutive. Therefore, basic and diluted net loss per share applicable to common shareholders is the same for periods with a net loss. See Note 3 for the computation of loss per share for the years ended December 31, 2018 and 2017. Segment Information In accordance with the provisions of ASC 280-10, “ Disclosures about Segments of an Enterprise and Related Information |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Note 3 – Loss per Share Basic and diluted loss per share is computed by dividing (i) loss available to common shareholders, by (ii) the weighted-average number of shares of common stock outstanding during the period. Basic loss per share excludes dilution and is computed by dividing loss attributable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company. For the years ended December 31, 2018 and 2017, basic loss per share is the same as diluted loss per share. The following table sets forth the computation of the Company’s basic and diluted net loss per share during the years ended December 31, 2018 and 2017: Year Ended December 31, 2018 2017 Numerator Net loss from continuing operations $ (13,587,512 ) $ (50,921,024 ) Deemed dividend from trigger of down round provision feature (231,843,826 ) (53,341,619 ) Net loss attributable to common stockholders, continuing operations $ (245,431,338 ) $ (104,262,643 ) Net loss from discontinued operations $ (434,843 ) $ (4,276,918 ) Net loss available to common stockholders $ (245,866,181 ) $ (108,539,561 ) Denominator Basic and diluted weighted average common shares outstanding 10,022,180 4,616 Loss per share, basic and diluted Basic and diluted, continuing operations $ (24.49 ) $ (22,587.23 ) Basic and diluted, discontinued operations $ (0.04 ) $ (926.54 ) Total basic and diluted $ (24.53 ) $ (23,513.77 ) Diluted loss per share excludes all dilutive potential shares if their effect is anti-dilutive. As of December 31, 2018 and 2017, the following potential common stock equivalents were excluded from the calculation of diluted loss per share as their effect was anti-dilutive: Year Ended December 31, 2018 2017 Warrants 53,130,510,439 4,352,806 Convertible preferred stock 7,863,880,588 359,563 Convertible debentures 2,179,779,002 653,839 Stock options 77 77 63,174,170,106 5,366,285 The terms of certain of the warrants, convertible preferred stock and convertible debentures issued by the Company provide for reductions in the per share exercise prices of the warrants and the per share conversion prices of the debentures and preferred stock (if applicable and subject to a floor in certain cases), in the event that the Company issues common stock or common stock equivalents (as that term is defined in the agreements) at an effective exercise/conversion price that is less than the then exercise/conversion prices of the outstanding warrants, preferred stock or debentures, as the case may be. In addition, many of these equity-based securities contain exercise or conversion prices that vary based upon the price of the Company’s common stock on the date of exercise/conversion (see Notes 9, 13 and 14). These provisions have resulted in significant dilution of the Company’s common stock and have given rise to reverse splits of the Company’s common stock. As a result of these down round provisions, the potential common stock and common stock equivalents totaled 756.4 billion at September 10, 2019 as more fully discussed in Note 21. See Note 14 regarding a discussion of the number of shares of the Company’s authorized common stock. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Accounts Receivable | Note 4 – Accounts Receivable Accounts receivable at December 31, 2018 and 2017 consisted of the following: December 31, 2018 2017 Accounts receivable - Clinical Laboratory Operations $ 622,009 $ 1,478,451 Accounts receivable - Hospital Operations 31,607,644 8,593,747 Total accounts receivable 32,229,653 10,072,198 Less: Allowance for discounts - Clinical Laboratory Operations (573,584 ) (1,177,054 ) Allowance for discounts - Hospital Operations (25,066,799 ) (6,936,429 ) Allowance for bad debts (2,777,521 ) (987,403 ) Accounts receivable, net $ 3,811,749 $ 971,312 For the years ended December 31, 2018 and 2017, bad debt expense was $9.4 million and $1.5 million, respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 5 – Property and Equipment Property and equipment at December 31, 2018 and 2017 consisted of the following: December 31, 2018 December 31, 2017 Medical equipment $ 1,946,000 $ 696,195 Land 550,700 - Building 6,482,260 1,359,472 Equipment 437,029 476,548 Equipment under capital leases 742,745 4,686,736 Furniture 244,828 222,824 Leasehold improvements 1,303,131 1,303,131 Vehicles 56,624 196,534 Computer equipment 224,447 226,441 Software 724,126 631,033 12,711,890 9,798,914 Less accumulated depreciation (4,184,986 ) (7,103,474 ) Property and equipment, net $ 8,526,904 $ 2,695,440 On January 13, 2017, the Company completed an asset purchase agreement to acquire certain assets related to the Big South Fork Medical Center, based in Oneida, Tennessee (the “Oneida Assets”). Big South Fork Medical Center is classified as a Critical Access Hospital (rural). The Company acquired the Oneida Assets out of bankruptcy for a purchase price of $1.0 million, and the purchase price has been recorded as property and equipment. The Company opened the hospital on August 8, 2017. On January 31, 2018, the Company entered into a purchase agreement to acquire certain assets and liabilities related to Jamestown Regional Medical Center. The purchase was completed on June 1, 2018. The Company has valued the net assets acquired at approximately $8.2 million, of which $7.1 million was recorded as property and equipment. The purchase is more fully discussed in Notes 1 and 6. Property and equipment are depreciated on a straight-line basis over their respective lives. The building is being depreciated over 39 years, leasehold improvements were depreciated over the life of the lease(s) and the remaining equipment is being depreciated over lives ranging from three to seven years. Depreciation expense on property and equipment was $1.2 million and $1.7 million for the years ended December 31, 2018 and 2017, respectively. Management periodically reviews the valuation of long-lived assets, including property and equipment, for potential impairment. Management did not recognize any impairment of these assets during the years ended December 31, 2018 and 2017. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Note 6 – Acquisitions Purchase Agreement Re Jamestown Regional Medical Center On June 1, 2018, the Company acquired a business engaging in acute hospital care located in Jamestown, Tennessee under an asset purchase agreement. The acquisition also included a separate physician practice which now operates under the Company as Mountain View Physician Practice, Inc. This acquisition was made as part of the Company’s business plan to acquire and operate clusters of rural hospitals. Pursuant to the asset purchase agreement, by and among the Company and Jamestown TN Medical Center, Inc., and HMA Fentress County Hospital, LLC, Jamestown HMA Physician Management, LLC and CHS/Community Health Systems, Inc. (the “Sellers”), the purchase price paid for the transaction was $635,096. The fair value of the purchase consideration paid to the Sellers was allocated to the net tangible and intangible assets acquired. The Company accounted for the acquisition as a business combination under U.S. GAAP. In accordance with the acquisition method of accounting under ASC Topic 805, “Business Combinations,” The fair value of the assets acquired, net of the liabilities assumed, was approximately $8.2 million. The excess of the aggregate fair value of the net tangible assets acquired over the purchase price was estimated to be $7.6 million and has been treated as a gain on bargain purchase in accordance with ASC 805. We attribute the gain primarily to the value of the land and building acquired. The purchase price allocation was based, in part, on our management’s knowledge of HMA Fentress County General Hospital and Jamestown HMA Physician Management, LLC. The following table shows the allocation of the purchase price of Jamestown Regional Medical Center to the acquired identifiable assets acquired, and liabilities assumed: Total purchase price $ 635,096 Tangible and intangible assets acquired, and liabilities assumed at estimated fair value: Cash $ 375 Inventories 450,682 Prepaids and deposits 310,385 Property and equipment 7,129,484 Intangible assets 504,806 Accrued expenses (193,966 ) Net tangible and intangible assets acquired $ 8,201,766 Gain on bargain purchase $ 7,566,670 The total cost relating to the acquisition was approximately $1,100,000. This includes $635,096, which includes closing costs of $35,735, legal costs of approximately $115,000, and other diligence related costs, which were expensed in 2018. The intangible assets acquired in the Jamestown acquisition consisted of the following at December 31, 2018: Acquired in 2018 Life Impairment in 2018 Amortization for the December 31, 2018 Carrying Value December 31, 2018 Certificate of need $ 259,443 Infinite $ - $ - $ 259,443 Non-compete 245,363 2 yrs. (173,799 ) (71,564 ) - Total intangibles $ 504,806 $ (173,799 ) $ (71,564 ) $ 259,443 As noted in the table above, we fully impaired the non-compete intangible asset acquired in the acquisition of Jamestown Regional Medical Center at December 31, 2018. We determined that this asset was impaired primarily due to the operating results of Jamestown Regional Medical Center since the acquisition on June 1, 2018, which were as follows: For the Period June 1, 2018 December 31, 2018 Net Revenue $ 7,898,222 Net Loss $ (2,022,380 ) The following presents the unaudited pro-forma combined results of operations of the Company and Jamestown Regional Medical Center as if the acquisition had occurred on January 1, 2017. Year Ended December 31, 2018 2017 (unaudited) Net revenue $ 19,983,266 $ 19,446,732 Net loss from continuing operations (15,720,672 ) (55,305,325 ) Net loss (16,155,515 ) (59,582,243 ) Deemed dividend from trigger of down round provision feature (231,843,826 ) (53,341,619 ) Net loss to common stockholders $ (247,999,341 ) $ (112,923,862 ) Net loss per common share: Basic and diluted continuing operations $ (24.70 ) $ (23,537.03 ) Basic and diluted net loss to common stockholders $ (24.75 ) $ (24,463.57 ) The unaudited pro-forma results of operations are presented for information purposes only. The unaudited pro-forma results of operations are not intended to present actual results that would have been attained had the acquisition been completed as of January 1, 2017 or to project potential operating results as of any future date or for any future periods. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Note 7 – Accrued Expenses Accrued expenses at December 31, 2018 and 2017 consisted of the following: December 31, 2018 December 31, 2017 Commissions payable $ 19,113 $ 24,470 Sales tax payable 8,016 - Accrued payroll and related liabilities 3,400,052 897,088 Accrued property tax 47,396 - Accrued interest 5,464,837 2,636,057 Other accrued expenses 1,771,867 1,409,790 Accrued expenses $ 10,711,281 $ 4,967,405 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 8 – Notes Payable The Company and its subsidiaries are party to a number of loans with affiliates and unrelated parties. At December 31, 2018 and December 31, 2017, notes payable consisted of the following: Notes Payable – Third Parties December 31, 2018 December 31, 2017 Loan payable under prepaid forward purchase contract $ 5,000,000 $ 5,000,000 Loan payable to TCA Global Master Fund, LP (“TCA”) in the original principal amount of $3 million at 16% interest (the “TCA Debenture”). Principal and interest payments due in various installments through December 31, 2017 1,741,893 1,616,218 Notes payable to CommerceNet and Jay Tenenbaum in the original principal amount of $500,000, bearing interest at 6% per annum (the “Tegal Notes”). Principal and interest payments due annually from July 12, 2015 through July 12, 2017 341,612 341,612 7,083,505 6,957,830 Less current portion (7,083,505 ) (6,957,830 ) Notes payable - third parties, net of current portion $ - $ - On March 31, 2016, the Company entered into an agreement to pledge certain of its accounts receivable as collateral against a prepaid forward purchase contract whereby the Company received consideration in the amount of $5.0 million. The receivables had an estimated collectable value of $8.7 million which had been adjusted down to $0 as of December 31, 2017. In exchange for the consideration received, the counterparty received the right to: (i) a 20% per annum investment return from the Company on the consideration, with a minimum repayment term of six months and minimum return of $0.5 million, (ii) all payments recovered from the accounts receivable up to $5.25 million, if paid in full within six months, or $5.5 million, if not paid in full within six months, and (iii) 20% of all payments of the accounts receivable in excess of amounts received in (i) and (ii). On March 31, 2017, to the extent that the counterparty had not been paid $6.0 million, the Company was required to pay the difference. Christopher Diamantes, a director of the Company, guaranteed the Company’s obligation. On March 24, 2017, the Company, the counterparty and Mr. Diamantis, as guarantor, entered into an amendment (the “Amendment”) to extend the Company’s obligation to March 31, 2018. Also, what the counterparty was to receive was amended to equal (a) the $5,000,000 purchase price plus a 20% per annum investment return thereon, plus (b) $500,000, plus (c) the product of (i) the proceeds received from the accounts receivable, minus the amount set forth in clauses (a) and (b), multiplied by (ii) 40%. In connection with the extension, the counterparty received a fee of $1,000,000. On April 2, 2018, the Company, the counterparty and Mr. Diamantis, as guarantor, entered into a second amendment to extend further the Company’s obligation to May 30, 2018. In connection with this further extension, the counterparty received a fee of $100,000. The counterparty instituted an arbitration proceeding under the agreement with regard to the outstanding balance. In December 2018, the Company, Mr. Diamantis and the counterparty entered into a preliminary settlement agreement in connection with the arbitration, with the terms of the settlement agreement revised on March 31, 2019. The Company and Mr. Diamantis agreed to pay the counterparty $2,000,000 on or before April 5, 2019 and an additional $7,694,685 plus interest at 10% per annum on or before May 20, 2019, which date was subsequently amended. On April 5, 2019 and May 31, 2019, Mr. Diamantis made payments totaling $5.0 million on behalf of the Company. The final payment of $4,937,105 was due on or before July 28, 2019. Mr. Diamantis made that payment on behalf of the Company on July 26, 2019. The Company and Mr. Diamantis have now complied with all of their obligations under the settlement agreement. As a result, the Company is obligated to repay Mr. Diamantis a total of $9,937,105. In addition to the $5,000,000 reflected in the table above, $4,937,105 is included on the Balance Sheets in Accrued Expenses at December 31, 2018. Additional amounts owed to Mr. Diamantis are discussed below and in Note 21. The Company did not make the required monthly principal and interest payments due under the TCA Debenture for the period from October 2016 through March 2017. On February 2, 2017, the Company made a payment to TCA in the amount of $0.4 million, which was applied to accrued and unpaid interest and fees, including default interest, as of the date of payment. On March 21, 2017, the Company made a payment to TCA in the amount of $0.75 million, of which approximately $0.1 million was applied to accrued and unpaid interest and fees in accordance with the terms of the TCA Debenture. Also on March 21, 2017, the Company entered into a letter agreement with TCA, which (i) waived any payment defaults through March 21, 2017; (ii) provided for the $0.75 million payment discussed above; (iii) set forth a revised repayment schedule whereby the remaining principal plus interest aggregating to approximately $2.6 million was to be repaid in various monthly installments from April of 2017 through September of 2017; and (iv) provided for payment of an additional service fee in the amount of $150,000, which was due on June 27, 2017, the day after the effective date of the registration statement filed by the Company; which amount is reflected in accrued expenses at December 31, 2018. In addition, TCA entered into an inter-creditor agreement with the purchasers of the convertible debentures (see Note 9) which sets forth rights, preferences and priorities with respect to the security interests in the Company’s assets. On September 19, 2017, the Company entered into a new agreement with TCA, which extended the repayment schedule through December 31, 2017. The principal balance as of December 31, 2018, was increased to $1.7 million from $1.4 million, which resulted from accrued interest. The remaining debt to TCA remains outstanding and TCA has made a demand for payment. The parties are currently working to amend the TCA Debenture to extend the maturity although there can be no assurance that the parties will agree to any such extension. The Company did not make the principal payments under the Tegal Notes that were due on July 12, 2016. On November 3, 2016, the Company received a default notice from the holders of the Tegal Notes demanding immediate repayment of the outstanding principal of $341,612 and accrued interest of $43,000. On December 7, 2016, the Company received a breach of contract complaint with a request for the entry of a default judgment (see Note 16). On April 23, 2018, the holders of the Tegal Notes received a judgment against the Company. To date, the Company has yet to repay this amount. Notes Payable – Related Parties December 31, 2018 December 31, 2017 Loan payable to Alcimede LLC, bearing interest at 6% per annum, with all principal and interest due August 2, 2018 $ - $ 168,500 Loan payable to Christopher Diamantis 800,000 960,000 Total notes payable, related parties 800,000 1,128,500 Less current portion of notes payable, related parties (800,000 ) (1,128,500 ) Total notes payable, related parties long-term $ - $ - On February 3, 2015, the Company borrowed $3.0 million from Alcimede LLC (“Alcimede”). Seamus Lagan, the Company’s President and Chief Executive Officer, is the sole manager of Alcimede. The note had an interest rate of 6% and was originally due on February 2, 2016. Alcimede later agreed to extend the maturity date of the loan to August 2, 2017. On June 29, 2015, Alcimede exercised options granted in October 2012 to purchase shares of the Company’s common stock, and the loan outstanding was reduced in satisfaction of the aggregate exercise price of $2.5 million. In August of 2016, $0.3 million was repaid by the Company through the issuance of shares of common stock. In March of 2017, the Company and Mr. Lagan agreed that a payment made to Alcimede in the amount of $50,000 would be deducted from the outstanding balance of the note. On August 2, 2017, the Company and Alcimede agreed to further extend the maturity date of the loan to August 2, 2018. On July 23, 2018, the Company issued preferred stock to Alcimede in full settlement of this loan as more fully discussed in Note 14. In January and February of 2017, the Company received advances aggregating $3.6 million from Christopher Diamantis, a director of the Company. The advances, along with $0.5 million of previously accrued but unpaid interest, were due on demand, bearing interest at 10% per annum. The Company used the advances to pay the purchase price for the Oneida Assets and for general corporate purposes. On March 7, 2017, the Company issued a promissory note to Mr. Diamantis relating to these advances received in 2017, plus accrued and unpaid interest of $0.5 million (and together with the advances and accrued interest the “2017 Diamantis Note”). The Company repaid $3.8 million of the 2017 Diamantis Note on March 21, 2017 with the proceeds received from the issuance of the Convertible Debentures (sees Note 9). During the year ended December 31, 2018, the Company borrowed $3.3 million from Christopher Diamantis and incurred interest of $0.3 million and repaid $4.0 million, including interest of $0.2 million. The loan payable balance, which bears interest at a rate of 10% on all amounts funded, was $0.8 million on December 31, 2018 and accrued interest was $0.2 million. See Note 21 for a discussion of amounts borrowed from Mr. Diamantis subsequent to December 31, 2018. |
Debentures
Debentures | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debentures | Note 9 – Debentures The carrying amount of all outstanding debentures as of December 31, 2018 and 2017 was as follows: December 31, 2018 2017 Debentures $ 19,034,800 $ 17,720,082 Discount on debentures (6,247,469 ) (12,127,634 ) Deferred financing fees (11,015 ) (224,733 ) 12,776,316 5,367,715 Less current portion (12,776,316 ) (1,615,693 ) Debentures, long term $ - $ 3,752,022 Payment on all outstanding debentures in the amount of $19,034,800 as of December 31, 2018 is due in 2019. February 2017 Offering On February 2, 2017, the Company issued $1.6 million aggregate principal amount of Original Issue Discount Convertible Debentures due three months from the date of issuance (the “February Debentures”) and warrants to purchase an aggregate of 13 shares of common stock, which can be exercised at any time after August 17, 2017 at an exercise price of $19,350 per share (the “February Warrants”), to an accredited investor for a purchase price of $1.5 million. On March 21, 2017, the February Debentures were exchanged for $2.5 million of exchange debentures as more fully discussed below. March 2017 Offerings On March 21, 2017, the Company issued $10.85 million aggregate principal amount of Senior Secured Original Issue Discount Convertible Debentures originally due March 21, 2019 (the “Convertible Debentures”). The Company received net proceeds from this transaction in the approximate amount of $8.4 million. The Company used $3.8 million of the net proceeds to repay a loan from Mr. Diamantis as more fully discussed in Note 8 and $0.75 million of the net proceeds to make the partial repayment on the TCA Debenture. The remainder of the net proceeds was used for general corporate purposes. In conjunction with the issuance of the Convertible Debentures, the holder of the February Debentures exchanged these debentures for $2.5 million of new debentures (the “Exchange Debentures” and, collectively with the Convertible Debentures, the “March Debentures”) on the same terms as, and pari passu with, the Convertible Debentures and warrants. The Company recorded non-cash interest expense in the amount of $0.4 million as a result of this exchange. Additionally, the holders of an aggregate of $2.2 million stated value of the Company’s Series H Convertible Preferred Stock (the “Series H Preferred Stock”) exchanged such preferred stock into $2.7 million principal amount of Exchange Debentures and warrants. The March Debentures contain a 24% original issue discount, have no regularly scheduled interest payments except in the event of a default and have a maturity date of March 21, 2019. As of December 31, 2018, approximately $2.0 million of the March Debentures were outstanding and were not paid as of March 21, 2019, the maturity date, as more fully discussed in Note 21. In connection with the March Debentures the Company issued warrants to purchase shares of the Company’s common stock to several accredited investors. At December 31, 2018, these warrants were exercisable into an aggregate of approximately 47.3 billion shares of common stock. The warrants were issued to the investors in three tranches, Series A Warrants, Series B Warrants and Series C Warrants (collectively, the “March Warrants”). At December 31, 2018, the Series A Warrants are exercisable for 17.9 billion shares of the Company’s common stock. They are immediately exercisable and have a term of exercise equal to five years. At December 31, 2018, the Series B Warrants are exercisable for 11.3 billion shares of the Company’s common stock and were initially exercisable for a period of 18 months. During 2018, the Company extended the exercise period twice, once to March 21, 2019 and the second time to June 21, 2019 and recorded an additional discount on the Series B Warrants of approximately $8.6 million as a result of the extensions, $6.4 million of which is included in interest expense in 2018. Subsequent to December 31, 2018, on March 27, 2019, the expiration date of the Series B Warrants was extended 90 days to September 21, 2019 and again on May 10, 2019 to March, 31, 2022. At December 31, 2018, the Series C Warrants are exercisable for 18.2 billion shares of the Company’s common stock and have a term of five years provided such warrants shall only vest if, when and to the extent that the holders exercise the Series B Warrants. At December 31, 2018, the Series A, Series B and Series C Warrants each have an exercise price of $.00102 per share, which reflects adjustments pursuant to their terms. The Series A, Series B and Series C Warrants are subject to “full ratchet” and other customary anti-dilution protections. The March Debentures are convertible into shares of the Company’s common stock, at a conversion price which has been adjusted pursuant to the terms of the March Debentures to $.00102 per share as of December 31, 2018, due to prices at which the Company has subsequently issued shares of common stock. The Convertible Debentures began to amortize monthly commencing on the 90th day following the closing date. The Exchange Debentures began to amortize monthly on the closing date. On each monthly amortization date, the Company may elect to repay 5% of the original principal amount of the March Debentures in cash or, in lieu thereof, the conversion price of such debentures will thereafter be 85% of the volume weighted average price at the time of conversion. In the event the Company does not elect to pay such amortization amounts in cash, each investor, in their sole discretion, may increase the conversion amount subject to the alternative conversion price by up to four times the amortization amount. The March Debentures contain customary affirmative and negative covenants. The conversion prices are subject to reset in the event of offerings or other issuances of common stock, or rights to purchase common stock, at a price below the then conversion price, as well as other customary anti-dilution protections as more fully described in the debentures. On October 30, 2017, the Company agreed to amend the March Debentures and March Warrants to remove the floor in the anti-dilution provisions therein. The conversion price of the March Debentures and the exercise price of the March Warrants as of December 31, 2018 stated above reflect the amendment as well as other adjustments for dilutive issuances, which triggered the down round provisions in the March Debentures and March Warrants. The March Debentures are secured by all the Company’s assets and are guaranteed by substantially all of the Company’s subsidiaries. The aggregate principal amount of the March Debentures, which were non-interest bearing, was $16 million. Between March 22, 2017 and December 31, 2018, holders of the March Debentures converted an aggregate of $14.0 million of principal into 4,258,172 shares of common stock. The exercise prices of the March Warrants issued relating to the March Debentures are subject to reset in the event of offerings or other issuances of common stock, or rights to purchase common stock, at a price below the then exercise price, as well as other customary anti-dilution protections. Because of these provisions, both the March Debentures and the March Warrants were deemed to be not indexed to the Company’s common stock, and the Company recognized derivative liabilities for the embedded conversion feature of the March Debentures and the March Warrants in the original amount of $15.3 million and $41.3 million, respectively. The Company recognized a discount for 100% of the principal value of the March Debentures and non-cash interest expense in the amount of $43.7 million regarding the recognition of these derivative liabilities. Because of the adoption of ASU 2017-11 in the second quarter of 2017, the interest expense and derivative liability originally recognized were adjusted and extinguished during 2017. See Note 2 for the adoption of ASU 2017-11 for the retrospective adjustments made to the Company’s consolidated financial statements with respect to the derivative liabilities associated with these debentures and warrants. For the years ended December 31, 2018 and 2017, reductions in the exercise prices of the March Warrants have given rise to deemed dividends as more fully discussed in Notes 2, 3 and 11. June 2017 Offerings In June 2017, the Company issued debentures due three months from the date of issuance in two issuances (collectively, the “June Debentures”) and warrants to purchase an aggregate of 200 shares of common stock (67 warrants in the June 2, 2017 transaction and 133 in the June 22, 2017 transaction), which can be exercised at any time after nine months at an exercise price of $2,925 per share for the June 2, 2017 warrants and $2,850 per share for the June 22, 2017 warrants (collectively the “June Warrants”), to accredited investors for a purchase price of $1,902,700 and proceeds to the Company of $1.5 million. The Company recorded a discount on the debentures of $107,700 which has been fully amortized. As more fully discussed below, on July 17, 2017, the June Debentures were exchanged. July 2017 Offerings On July 17, 2017, the Company closed an offering of $4,136,862 aggregate principal amount of Original Issue Discount Debentures due October 17, 2017 (the “July Debentures”) and warrants to purchase an aggregate of 283 shares of common stock (the “July Warrants”) for consideration of $2,000,000 in cash and the exchange of the full $1,902,700 aggregate principal amount of the June Debentures. The July Debentures were guaranteed by substantially all the subsidiaries of the Company pursuant to a Subsidiary Guarantee in favor of the holders of the July Debentures. As more fully discussed below, on September 19, 2017, the July Debentures were exchanged for $6.4 million of exchange debentures. The July Warrants are exercisable into shares of the Company’s common stock at any time from and after six months from the closing date at an exercise price of $2,812.50 per common share (subject to adjustment). The July Warrants will terminate five years after they become exercisable. September 2017 Offerings On September 19, 2017, the Company closed an offering of $2,604,000 principal amount of Senior Secured Original Issue Discount Convertible Debentures due September 19, 2019 (the “New Debentures”) and three series of warrants to purchase an aggregate of 69,355 shares of the Company’s common stock (the “Series A Warrants,” the “Series B Warrants,” and the “Series C Warrants,” and collectively, the “September Warrants”). The offering was pursuant to the terms of a Securities Purchase Agreement, dated as of August 31, 2017 (the “Purchase Agreement”), between the Company and certain existing institutional investors of the Company. The Company received proceeds of $2,100,000 from the offering. Also on September 19, 2017, the Company closed exchanges by which the holders of the Company’s July Debentures exchanged $4,136,862 principal amount of such debentures for $6,412,136 principal number of new debentures on the same items as, and pari passu with, the New Debentures (the “September Exchange Debentures” and, together with the New Debentures, the “September Debentures”). The Company recorded non-cash interest expense in the amount of $1.0 million because of this exchange. All issuance amounts of the September Debentures reflect a 24% original issue discount. The September Debentures contain customary affirmative and negative covenants. The conversion price is subject to “full ratchet” and other customary anti-dilution protections as more fully described in the debentures. The September Debentures may be converted at any time into shares of the Company’s common stock. Originally, the September Debentures begin to amortize monthly commencing on October 1, 2017, and for the first three amortization dates, the amortization amount was $100,000. On October 19, 2017, the September Debentures were amended so that they began to amortize immediately. On each monthly amortization date, the Company may elect to repay 5% of the original principal amount of September Debentures in cash or, in lieu thereof, the conversion price of such September Debentures shall thereafter be 85% of the volume weighted average price at the time of conversion, but not less than the floor of $390.00 per share. In the event the Company does not elect to pay such amortization amounts in cash, each investor, in their sole discretion, may increase the conversion amount subject to the alternative conversion price by up to four times the amortization amount. On October 30, 2017, the Company entered into exchange agreements (“Exchange Agreements”) with the holders of the September Debentures to provide that the holders may, from time to time, exchange their September Debentures for shares of a newly-authorized Series I-2 Convertible Preferred Stock of the Company (the “Series I-2 Preferred Stock”) (See Note 13.). On February 8, 2018, $1,384,556 of the September Debentures were exchanged for 1,730.1 shares of Series I-2 Preferred Stock and the Company recorded a loss on the exchange of $651,562. On July 16, 2018, $1,741,580 of the September Debentures were exchanged for 2,176.9 shares of Series I-2 Preferred Stock and the Company recorded a loss on the exchange of $819,561. The Series I-2 Preferred Stock is more fully discussed in Note 13. At December 31, 2018, the Series A Warrants are exercisable for an aggregate of 23,118 shares of the Company’s common stock. They are immediately exercisable and have a term of exercise equal to five years. At December 31, 2018, the Series B Warrants are exercisable for an aggregate of 23,119 shares of the Company’s common stock and were initially exercisable for a period of 18 months commencing immediately. During 2018, the exercise period of the Series B Warrants was extended to June 19, 2019, which resulted in a de minimus additional discount. Subsequent to December 31, 2018, on March 27, 2019, the expiration date of these Series B Warrants was extended 90 days to September 21, 2019 and again on May 10, 2019 the expiration date was extended to March, 31, 2022. At December 31, 2018, the Series C Warrants are exercisable for an aggregate of 23,118 shares of the Company’s common stock, and have a term of five years provided such Series C Warrants shall only vest if, when and to the extent that the holders exercise the Series B Warrants. The September Warrants exercise price is subject to a floor of $390.00 per share. At December 31, 2018, the September Warrants exercise price was $390.00 per share. The September Warrants contain down round provisions, subject to a floor of $390.00 per share. The September Warrants are subject to “full ratchet” and other customary anti-dilution protections. The Company’s obligations under the September Debentures are secured by a security interest in all of the Company’s and its subsidiaries’ assets, pursuant to the terms of the Security Agreement, dated as of March 20, 2017. 2018 Offerings On March 5, 2018, May 14, 2018, May 21, 2018 and June 28, 2018, the Company closed offerings of $6,810,000 aggregate principal amount of Senior Secured Original Issue Discount Convertible Debentures due September 19, 2019. The Company received proceeds of $5.5 million in the offerings net of the original issue discount of $1,310,000. On July 16, 2018, August 2, 2018, September 6, 2018 and November 8, 2018, the Company entered into Additional Issuance Agreements (the “Issuance Agreements”), with two existing institutional investors of the Company. Under the Issuance Agreements, the Company issued $4.3 million aggregate principal amount of Senior Secured Original Issue Discount Convertible Debentures due September 19, 2019 and received proceeds of $3.5 million. The conversion terms of these debentures are the same as those issued in September 2017 under the Purchase Agreement, dated as of August 31, 2017, as more fully described above, with the exception of the floor conversion price, which is $.052 per share. These debentures may also be exchanged for shares of the Company’s Series I-2 Preferred Stock under the terms of the Exchange Agreements. These debentures were not paid on September 19, 2019, the maturity date, as more fully discussed in Note 21. During the years ended December 31, 2018 and 2017, the Company realized a total of $24.7 million in proceeds from the issuances of the debentures and warrants. At December 31, 2018, the unamortized discounts were $6.2 million. These discounts represent original issue discounts, the relative fair value of the warrants issued with the debentures, including the modifications thereof, and the relative fair value of the beneficial conversion features of the debentures. During the years ended December 31, 2018 and 2017, the Company recorded approximately $17.6 million and approximately $19.0 million, respectively, of non-cash interest and amortization of debt discount expense primarily in connection with the debentures and warrants. See Note 14 for summarized information related to warrants issued and the activity during the years ended December 31, 2018 and 2017. See Notes 3 and 11 for a discussion of the dilutive effect of the outstanding debentures and warrants as of December 31, 2018. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10 – Related Party Transactions In addition to the transactions discussed in Notes 8, 9 and 14, the Company had the following related party transactions during the years ended December 31, 2018 and 2017: Monarch Capital, LLC (“Monarch”) billed the Company for consulting fees delivered in 2017, pursuant to a consulting agreement in the amount of $0.1 million. While the agreement expired on August 31, 2017, the balance remains outstanding at December 31, 2018. Michael Goldberg, a director of the Company up until his resignation effective April 24, 2017, is the Managing Director of Monarch. Alcimede billed $0.4 million and $0.4 million for the years ended December 31, 2018 and 2017, respectively, pursuant to a consulting agreement originally entered into in 2012. It is subject to annual renewals. Seamus Lagan, the Company’s President and Chief Executive Officer, is the sole manager of Alcimede (see Notes 8 and 14). The terms of the foregoing transactions, including those discussed in Notes 8, 9, and 14, are not necessarily indicative of those that would have been agreed to with unrelated parties for similar transactions. |
Derivative Financial Instrument
Derivative Financial Instruments and Fair Value | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Fair Value | Note 11 – Derivative Financial Instruments and Fair Value In accordance with ASC 820, “ Fair Value Measurements and Disclosures ● Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date. ● Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; or quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets). ● Level 3 applies to assets or liabilities for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including our own assumptions. The estimated fair value of financial instruments is determined by the Company using available market information and valuation methodologies considered to be appropriate. At December 31, 2018 and 2017, the carrying value of the Company’s accounts receivable, accounts payable and accrued expenses approximate their fair values due to their short-term nature. The following table sets forth the financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2018 and 2017: Level 1 Level 2 Level 3 Total As of December 31, 2017: Embedded conversion options $ - $ - $ 1,577,025 $ 1,577,025 Common stock warrants - - 10,858,225 10,858,225 Total $ - $ - $ 12,435,250 $ 12,435,250 As of December 31, 2018: Embedded conversion options - - 350,260 350,260 Total $ - $ - $ 350,260 $ 350,260 The Company reclassified the derivative liability previously reported at December 31, 2017 as long term to current liability. In September 2018, the Company’s board of directors approved two reverse stock splits of the Company’s common stock, one of which was effected on November 12, 2018 (the second was not effected) and which provided sufficient authorized and unissued shares to allow for otherwise equity classified instruments to be classified in equity. As a result, the fair value of these instruments was evaluated for reclassification. As a result of the evaluation, during 2018, the Company reclassified the derivative liabilities previously reported as a current liability to derivative income. On October 4, 2019, the Board of Directors authorized the issuance and sale of certain shares of Series K Convertible Preferred Stock to Alcimede LLC pursuant to the terms of an Exchange Agreement. The Board considered all options to secure additional financing required to continue operations and determined this authorization to be necessary to secure needed financing in the required time frame. As a result of this authorization, as of the date of filing this report, the Company believes that it has the ability to have sufficient authorized shares of its common stock to cover all potentially dilutive common shares outstanding. For embedded conversion options, the Company determined the fair value as of December 31, 2018 by comparing the discounted conversion price per share (85% of market price, subject to a floor in certain cases) multiplied by the number of shares issuable at the balance sheet date to the actual price per share of the Company’s common stock multiplied by the number of shares issuable at that date with the difference in value recorded as a liability. During 2018, the Company extended the exercise period of the Series B Warrants twice, once to March 21, 2019 and the second time to June 21, 2019 and recorded an additional discount on the Series B Warrants of approximately $8.6 million as a result of the extensions, $6.4 million of which is included in interest expense in 2018. The Company used the Black Scholes model to calculate the fair value of the warrants as of the modification dates. Using the pre-modification term and related assumptions of risk free rates ranging from 1.91-2.32%, volatility ranging from 184.0-296.3% and weighted average remaining life of .33 years, and the post-modification term and related assumptions of risk free rates ranging from 2.09-2.56%, volatility ranging from 208.2-249.1% and weighted average remaining life of .65 years, the change in the fair value of the warrant instruments as a result of the modifications was estimated on each date. The following table reconciles the changes in the liabilities categorized within Level 3 of the fair value hierarchy for the year ended December 31, 2018: Balance at December 31, 2017 $ 12,435,250 Gain on change in fair value of debentures and warrants* (15,167,335 ) Fair value of warrants exercised (4,619,150 ) Fair value of debentures converted (1,408,901 ) Fair value of debentures exchanged for Series I-2 Preferred Stock (1,420 ) Modification of warrants 8,603,069 Convertible debt 508,747 Balance at December 31, 2018 $ 350,260 *In addition to the gain on change in fair value of debentures and warrants of $15.2 million during the year ended December 31, 2018, the Company recorded a loss on the exchange of convertible debentures into shares of its Series I-2 Preferred Stock of approximately $1.5 million, as more fully discussed in Note 13. During 2018, subsequent to the board approval of the reverse splits and the resulting reclassification of the warrants from liabilities to equity and in some cases subsequent to the November 12, 2018 reverse stock split, the conversion of certain convertible notes and preferred stock and or the exercise of warrants triggered a further reduction in the exercise prices of any debentures and warrants containing ratchet features that had not already ratcheted down to their floor. In accordance with US GAAP, the incremental fair value of the debentures and warrants was measured, ignoring the down-round provision, using Black Scholes. The incremental value of $231.8 million and $53.3 million was recorded as a deemed dividend for the years ended December 31, 2018 and 2017, respectively. The following assumptions were utilized in the valuation models to determine the incremental value and fair value changes: risk free rates ranging from 2.47-2.98%, volatility ranging from 167-257% and a weighted-average remaining life of 2.87 years. Deemed dividends are also discussed in Notes 2 and 3. For the year ended December 31, 2018, total gain realized on instruments valued using Level 3 valuations was $15.2 million. For the year ended December 31, 2017, total loss realized on instruments valued using Level 3 valuations was $12.4 million. In addition, during the year ended December 31, 2018, the Company recorded a loss on the exchange of convertible debentures into shares of its Series I-2 Preferred Stock of approximately $1.5 million. |
Capital Lease Obligations
Capital Lease Obligations | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Capital Lease Obligations | Note 12 – Capital Lease Obligations The Company leases various assets under capital leases that consisted of the following: December 31, 2018 December 31, 2017 Medical equipment $ 742,745 $ 4,686,736 Less accumulated depreciation (723,318 ) (3,842,443 ) Net $ 19,427 $ 844,293 Depreciation expense on assets under capital leases was $0.5 million and $1.0 million for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, the Company is in default of the majority of its lease obligations, therefore the aggregate future minimum rentals and accrued interest under capital leases in the amount of $0.8 million are deemed to be due immediately and payments totaling $31,543 are due in 2020. The significant reduction in the leased assets at December 31, 2018 from December 31, 2017, was due to the sale and or surrender of certain leased medical equipment relating to our laboratory operations, which have significantly decreased in size over the past two years. For the year ended December 31, 2018, the Company recorded a non-cash gain of $551,155 on the sale of leased equipment. |
Redeemable Preferred Stock
Redeemable Preferred Stock | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Redeemable Preferred Stock | Note 13 – Redeemable Preferred Stock The Company has 5,000,000 authorized shares of Preferred Stock at a par value of $0.01. Issuances of the Company’s Preferred Stock included as part of stockholders’ deficit are discussed in Note 14. The following is a summary of the issuances of the Company’s Redeemable Preferred Stock. Series I-1 Convertible Preferred Stock On October 30, 2017, the Company closed an offering of $4,960,000 stated value of 4,960 shares of a newly-authorized Series I-1 Convertible Preferred Stock (the “Series I-1 Preferred Stock”). Each share of Series I-1 Preferred Stock has a stated value of $1,000. The offering was pursuant to the terms of the Securities Purchase Agreement, dated as of October 30, 2017 (the “Purchase Agreement”), between the Company and certain existing institutional investors of the Company. The Company received proceeds of $4.0 million from the offering. The Purchase Agreement gives the investors the right to participate in up to 50% of any offering of common stock or common stock equivalents by the Company. In the event of any such offering, the investors may also exchange all or some of their Series I-1 Preferred Stock for such new securities on an $0.80 stated value of Series I-1 Preferred Stock for $1.00 of new subscription amount basis. Each share of Series I-1 Preferred Stock is convertible into shares of the Company’s common stock at any time at the option of the holder at a conversion price equal to the lesser of (i) $1.00, subject to adjustment, and (ii) 85% of the lesser of the volume weighted average market price of the common stock on the day prior to conversion or on the day of conversion. The conversion price is subject to “full ratchet” and other customary anti-dilution protections as more fully described in the Certificate of Designation of the Series I-1 Preferred Stock. Upon the occurrence of certain Triggering Events, as defined in the Certificate of Designation of the Series I-1 Preferred Stock, the holder shall, in addition to any other right it may have, have the right, at its option, to require the Company to either redeem the Series I-1 Preferred Stock in cash or in certain circumstance in shares of common stock at the redemption prices set forth in the Certificate of Designation. Series I-2 Convertible Preferred Stock On October 30, 2017, the Company entered into Exchange Agreements with the holders of the September Debentures to provide that the holders may, from time to time, exchange their September Debentures for shares of a newly-authorized Series I-2 Preferred Stock. The exchange agreements permitted the holders of the September Debentures to exchange specified principal amounts of the September Debentures on various closing dates starting on December 2, 2017, as more fully discussed in Note 9. At the holder’s option each holder may reduce the principal amount of September Debentures exchanged on any particular closing date, or elect not to exchange any September Debentures at all on a closing date. If a holder does choose to exchange less principal amount of September Debentures, or no September Debentures at all, it can carry forward such lesser amount to a future closing date and then exchange more than the originally specified principal amount for that later closing date. For each $0.80 of principal amount of September Debenture surrendered to the Company at any closing date, the Company will issue the holder a share of Series I-2 Preferred Stock with a stated value of $1.00. Each share of Series I-2 Preferred Stock is convertible into shares of the Company’s common stock at any time at the option of the holder at a conversion price equal to the lesser of (i) $1.00, subject to adjustment, and (ii) 85% of the lesser of the volume weighted average market price of the common stock on the day prior to conversion or on the day of conversion. The conversion price is subject to “full ratchet” and other customary anti-dilution protections as more fully described in the Certificate of Designation of the Series I-2 Preferred Stock. From December 2, 2017 through March 1, 2018, any exchange under the Exchange Agreements was at the option of the holder. Subsequent to March 2018, any exchange is at the option of the Company. The Company’s board of directors has designated up to 21,346 shares of the 5,000,000 authorized shares of preferred stock as the Series I-2 Preferred Stock. Each share of Series I-2 Preferred Stock has a stated value of $1,000. Upon the occurrence of certain Triggering Events (as defined in the Certificate of Designation of the Series I-2 Preferred Stock), the holder shall, in addition to any other right it may have, have the right, at its option, to require the Company to either redeem the Series I-2 Preferred Stock in cash or in certain circumstance in shares of common stock at the redemption prices set forth in the Certificate of Designation. On February 9, 2018, the holders exchanged a portion of the September Debentures for shares of the Series I-2 Preferred Stock for the first time. On that date, the holders elected to exchange an aggregate of $1,384,556 principal amount of September Debentures and the Company issued an aggregate 1,730.7 shares of its Series I-2 Preferred Stock. On July 16, 2018, the holders exchanged a portion of the September Debentures for shares of the Company’s Series I-2 Preferred Stock. On that date, the holders elected to exchange an aggregate of $1,741,580 principal amount of the September Debentures and the Company issued an aggregate of 2,176.975 shares of its Series I-2 Preferred Stock. The Company recorded a loss of approximately $1.5 million as a result of these exchanges. In 2018, the holder converted 1,286.141 shares of Series I-2 Preferred Stock into 106,335,991 shares of the Company’s common stock. See Notes 3 and 21 for a discussion of the dilutive effect of the Series I-1 Preferred Stock and the Series I-2 Preferred Stock as of December 31, 2018 and September 10, 2019. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Deficit | Note 14 – Stockholders’ Deficit Authorized Capital The Company has 10,000,000,000 authorized shares of Common Stock at $0.0001 par value and 5,000,000 authorized shares of Preferred Stock at a par value of $0.01. Preferred Stock The Company has 5,000,000 shares, par value $0.01, of preferred stock authorized. As of December 31, 2018, the Company had outstanding shares of preferred stock consisting of shares of its Series I-1 Preferred Stock and shares of Series I-2 Preferred Stock (both of which are more fully discussed in Note 13), 215 shares of its Series G Preferred Stock, 10 shares of its Series H Preferred Stock, 1,750,000 shares of its Series F Convertible Preferred Stock and 250,000 shares of its Series J Convertible Preferred Stock. The Series G Preferred Stock has a stated value of $1,000 per share and is convertible into shares of the Company’s common stock at a price equal to 85% of the volume weighted average price of the Company’s common stock at the time of conversion. The Series H Preferred Stock has a stated value of $1,000 per share and is convertible into shares of the Company’s common stock at a conversion price of 85% of the volume weighted average price of the Company’s common stock at the time of conversion. During the year ended December 31, 2017, 7,785 shares of Series H Preferred Stock were converted into 742 shares of common stock in accordance with the terms of the Series H Preferred Stock. Also during the year ended December 31, 2017, 2,174 shares of Series H Preferred Stock with a stated value of $2.2 million were exchanged for Exchange Debentures with an aggregate principal amount of $2.7 million and warrants (see Note 9). On June 28, 2018, 50 shares of the Series H Preferred Stock were converted into 40,000 shares of the Company’s common stock. In connection with the acquisition of Genomas, Inc., on September 27, 2017, which is more fully discussed in Note 20, the Company issued 1,750,000 shares of its Series F Convertible Preferred Stock valued at $174,097. Each share of the Series F Preferred Stock is convertible into shares of our common stock (subject to adjustment as provided in the related certificate of designation of preferences, rights and limitations) at any time after the first anniversary of the issuance date at the option of the holder at a conversion price equal to the greater of $14,625 or the average closing price of the Company’s common stock for the 10 trading days immediately preceding the conversion. The maximum number of shares of common stock issuable upon the conversion of the Series F Preferred Stock is 120. Any shares of Series F Preferred Stock outstanding on the fifth anniversary of the issuance date will be mandatorily converted into common stock at the applicable conversion price on such date. At any time, from time to time after the first anniversary of the issuance date, the Company has the right to redeem all or any portion of the outstanding Series F Preferred Stock at a price per share equal to $1.95 plus any accrued but unpaid dividends. The Series F Preferred Stock has voting rights. Each share of Series F Preferred Stock has one vote, and the holders of the Series F Preferred Stock shall vote together with the holders of the Company’s common stock as a single class. On July 20, 2018, the Company filed a Certificate of Designation with the Secretary of State of the State of Delaware to authorize the issuance of up to 250,000 shares of its Series J Convertible Preferred Stock (the “Series J Preferred Stock”). On July 23, 2018, the Company entered into an Exchange Agreement (the “Agreement”) with Alcimede, of which Seamus Lagan, our Chief Executive Officer, is the sole manager. Pursuant to the Agreement, the Company issued to Alcimede 250,000 shares of the Series J Preferred Stock in exchange for the cancellation of the outstanding principal and interest owed by the Company to Alcimede under the Note, dated February 5, 2015, and the cancellation of certain amounts owed by the Company to Alcimede under a consulting agreement between the parties. The total amount of consideration paid by Alcimede to the Company equaled $250,000. Each share of the Series J Preferred Stock has a stated value of $1.00. The conversion price is equal to the average closing price of the Company’s common stock on the 10 trading days immediately prior to the conversion date. Each holder of the Series J Preferred Stock is entitled to vote on all matters submitted to a vote of the holders of the Company’s common stock. With respect to a vote of stockholders, no later than September 30, 2018 only, to approve either or both of a reverse stock split of the Company’s common stock and an increase in the authorized shares of common stock from three billion shares to up to ten billion shares, each share of the Series J Preferred Stock had the whole number of votes equal to 24 shares of common stock. With respect to all other matters, and from and after October 1, 2018, each share of the Series J Preferred Stock is entitled to the whole number of votes equal to the number of common shares into which it is then convertible. The full terms of the Series J Preferred Stock are listed in the Certificate of Designations filed as Exhibit 3.16 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 24, 2018. The Series J Preferred Stock is entitled to 8% per annum cumulative dividends at the discretion of the Company’s board of directors. No dividends have been declared by the board as of December 31, 2018. The following table summarizes the activity in the Company’s various classes of Preferred Stock included in Stockholders’ Deficit for the years ended December 31, 2018 and 2017: Series G Series H Series F Series J Total Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Balance December 31, 2016 215 $ 2 10,019 $ 100 - $ - - $ - 10,234 $ 102 Conversion of Series H Preferred Stock into common stock - - (7,785 ) (78 ) - - - - (7,785 ) (78 ) Issuance of Series F Preferred Stock for business acquisition - - - - 1,750,000 17,500 - - 1,750,000 17,500 Exchange of Series H Preferred Stock for convertible debentures - - (2,174 ) (22 ) - - - - (2,174 ) (22 ) Balance December 31, 2017 215 $ 2 60 $ 0 1,750,000 $ 17,500 - $ - 1,750,275 $ 17,502 Series G Series H Series F Series J Total Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Balance December 31, 2017 215 $ 2 60 $ - 1,750,000 $ 17,500 - $ - 1,750,275 $ 17,502 Conversion of Series H Preferred Stock into common stock - - (50 ) - - - - (50 ) - Issuance of Series J Preferred Stock - - - 250,000 2,500 250,000 2,500 Balance December 31, 2018 215 $ 2 10 $ - 1,750,000 $ 17,500 250,000 $ 2,500 2,000,225 $ 20,002 Common Stock On May 9, 2018, the Company filed an amendment to its Certificate of Incorporation, as amended, to increase its authorized common stock to 3,000,000,000 shares, and on September 18, 2018, the Company amended its Certificate of Incorporation, as amended, to have the authority to issue 10,000,000,000 shares of Common Stock, par value $.0001 per share, and 5,000,000 shares of Preferred Stock, par value $0.01 per share. The Company had 128,567,273 and 39,502 shares of common stock issued and outstanding at December 31, 2018 and 2017, respectively. During the year ended December 31, 2018, the Company: ● issued an aggregate of 4,221,601 shares of its common stock upon conversion of $6.7 million of the principal amount of the March 2017 Debentures. The value of the common stock issued was based on the fair value of the stock at the time of issuance; ● issued 17,788,579 shares of common stock upon exercise of 106,006,177 warrants, on a cashless basis; ● issued 40,000 shares of common stock upon the conversion of 50 shares of its Series H Preferred stock as discussed above; and ● Issued 106,335,991 shares of common stock upon the conversion of 1286.141 shares of its Series I-2 Preferred Stock; Restricted Stock On August 14, 2017, the Board of Directors, based on the recommendation of the Compensation Committee of the Board and in accordance with the provisions of the 2007 Equity Plan, approved grants to employees and directors of the Company of an aggregate of 364 shares of restricted common stock of the Company. The grants fully vested on the first anniversary of the date of grant, subject to the grantee’s continued status as an employee or director on the vesting date. The Company recorded $244,768 of compensation expense related to this restricted stock in 2017. The value of the common stock issued was based on the fair value of the stock at the time of issuance. Activity during the year ended December 31, 2018: ● 122 shares of the restricted stock were forfeited by their terms and returned to treasury. ● the Company issued an aggregate of 142,667 shares of restricted stock to employees and directors, based upon the recommendation of the Compensation Committee of the Board. The grants fully vested immediately. The Company recognized stock-based compensation in the amount of $477,933 for the grant of such restricted stock based on a valuation of $3.35 per share. ● The Company recorded $189,209 of compensation expense related to the restricted stock issued in 2017. Common Stock and Common Stock Equivalents The Company has outstanding options, warrants, convertible preferred stock and convertible debentures. Exercise of the options and warrants, and conversions of the convertible preferred stock and debentures could result in substantial dilution of our common stock and a decline in its market price. In addition, the terms of certain of the warrants, convertible preferred stock and convertible debentures issued by us provide for reductions in the per share exercise prices of the warrants and the per share conversion prices of the debentures and preferred stock (if applicable and subject to a floor in certain cases), in the event that we issue common stock or common stock equivalents (as that term is defined in the agreements) at an effective exercise/conversion price that is less than the then exercise/conversion prices of the outstanding warrants, preferred stock or debentures, as the case may be. These provisions, as well as the issuances of debentures and preferred stock with conversion prices that vary based upon the price of our common stock on the date of conversion, have resulted in significant dilution of our common stock and have given rise to reverse splits of our common stock. On October 4, 2019, the Board of Directors authorized the issuance and sale of certain shares of Series K Convertible Preferred Stock to Alcimede LLC pursuant to the terms of an Exchange Agreement. The Board considered all options to secure additional financing required to continue operations and determined this authorization to be necessary to secure needed financing in the required time frame. As a result of this authorization, as of the date of filing this report, the Company believes that it has the ability to have sufficient authorized shares of its common stock to cover all potentially dilutive common shares outstanding. Stock Options The Company maintained and sponsored the Tegal Corporation 2007 Incentive Award Equity Plan (the “2007 Equity Plan”). Tegal Corporation is the prior name of the Company. The 2007 Equity Plan, as amended, provided for the issuance of stock options and other equity awards to the Company’s officers, directors, employees and consultants. The 2007 Equity Plan terminated pursuant to its terms in September 2017. The following table summarizes the stock option activity for the years ended December 31, 2018 and 2017: Number of options Weighted- average exercise price Weighted- average contractual term Outstanding at December 31, 2016 95 $ 970,725 8.93 Granted - Expired - Forfeit (18 ) Outstanding at December 31, 2017 77 $ 1,035,374 8.33 Granted - Expired - Forfeit - Outstanding at December 31, 2018 77 $ 1,036,374 7.33 Exercisable at December 31, 2018 68 $ 1,152,616 The Company recognized stock option expense of approximately $0.1 million and $0.2 million for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, the weighted average remaining contractual life was 7.3 years for options outstanding and exercisable. The intrinsic value of options exercisable at December 31, 2018 and 2017 was $0. As of December 31, 2018, the remaining compensation expense of approximately $34,600 will be expensed over the remaining amortization period, which is approximately one year. The Company estimates forfeiture and volatility using historical information. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues over the equivalent lives of the options. The expected life of the options represents the estimated period using the simplified method. The Company has not paid cash dividends on its common stock and no assumption of dividend payment(s) is made in the model. The following table summarizes information with respect to stock options outstanding and exercisable by employees and directors at December 31, 2018: Options outstanding Options vested and exercisable Exercise price Number outstanding Weighted average remaining contractual life (years) Weighted average exercise Aggregate intrinsic value Number vested Weighted average exercise Aggregate intrinsic value $ 2,250,500 22 7.25 $ – 22 $ 2,250,500 $ - $ 1,125,500 22 7.25 - 22 $ 1,125,500 - $ 225,000 16 7.33 - 12 $ 225,000 - $ 67,500 15 7.54 – 12 $ 67,500 – 77 $ 1,036,374 $ – 68 $ 1,152,616 $ – Warrants The Company, as part of various debt and equity financing transactions, has issued warrants to purchase shares of the Company’s common stock. During the year ended December 31, 2018, the Company issued 53,234,923,889 warrants as a result of the anti-dilution provisions of outstanding warrants that were issued in connection with the issuances of debentures as more fully discussed in Note 9. The terms of the debenture warrants are more fully discussed in Note 9. The number of warrants issued, converted and outstanding as well as the exercise prices of the warrants reflected in the table below have been adjusted to reflect the full ratchet and other dilutive and down round provisions pursuant to the warrant agreements as of December 31, 2018. As a result of the full ratchet provisions of the majority of the outstanding warrants (subject to a floor in some cases), subsequent decreases in the price of the Company’s common stock and subsequent issuances of the Company’s common stock or common stock equivalents at prices below the current exercise prices of the warrants have resulted in increases in the number of shares issuable pursuant to the warrants and decreases in the exercise prices. The following summarizes the information related to warrant activity during the years ended December 31, 2018 and 2017: Number of warrants Weighted average exercise price Balance at December 31, 2016 188 $ 87,750.00 Increase in warrants during the period as a result of down round provisions 4,353,957 $ 18.8119 Warrants exchanged during the period (13 ) $ (93,525.00 ) March Warrants exercised during the period (1,326 ) $ 482.3643 Balance at December 31, 2017 4,352,806 $ 22.1782 Increase in warrants during the period as a result of down round provisions 53,234,923,889 March Warrants expired during the period (2,760,079 ) $ (0.1700 ) March Warrants exercised during the period (106,006,177 ) $ (0.0419 ) Balance at December 31, 2018 53,130,510,439 $ 0.0017 See above and Notes 3, 9 and 21 for a discussion of the dilutive effect of the outstanding warrants. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 15 – Income Taxes The provision for income taxes for the years ended December 31, 2018 and 2017 consists of the following: 2018 2017 Current Federal $ 766,070 $ 1,015,724 State - - 766,070 1,015,724 Deferred Federal - - State - - Provision for income taxes $ 766,070 $ 1,015,724 The following reconciles the Federal statutory income tax rate to the Company’s effective tax rate for the years ended December 31, 2018 and 2017: 2018 2017 % % Federal statutory rate 21.00 34.00 Permanent and other items (5.81 ) (0.06 ) Beneficial conversion feature - (20.05 ) Federal income taxes audit and other adjustments 93.55 - Rate change - (10.40 ) Change in valuation allowance (102.77 ) (1.49 ) 5.97 2.00 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In assessing the realizability of deferred tax assets, Management evaluates whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on Management’s evaluation, it is more likely than not that the deferred tax asset will not be realized and as such a valuation allowance has been recorded as of December 31, 2018 and 2017. Deferred tax assets and liabilities are comprised of the following at December 31, 2018 and 2017: 2018 2017 Deferred income tax assets: Amortization $ 914,520 $ 978,688 Net operating loss carryforward 19,567,649 5,244,000 Goodwill and intangible assets - (112,742 ) Allowance for doubtful accounts 703,873 259,110 Charitable contributions 593 618 Stock options 936,641 700,745 Accrued liabilities 390,041 121,993 Business interest expense 989,408 - Deferred state tax asset 1,139,059 595,531 24,641,784 7,787,943 Deferred income tax liabilities: Depreciation (2,301,605 ) (406,310 ) - (406,310 ) Deferred tax asset, net 22,340,179 7,381,633 Less: valuation allowance (22,340,179 ) (7,381,633 ) Net deferred tax assets $ - $ - On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was signed into law. The TCJA includes a number of provisions impacting us, including the lowering of the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018 and 100% bonus depreciation for qualifying capital expenditures acquired and placed into service after September 27, 2017, among others. Management has reviewed the provisions regarding assessment of their valuation allowance on deferred tax assets and based on that criteria determined that it should record a valuation allowance of $22.3 million and $7.4 million against its deferred tax assets as of December 31, 2018 and 2017, respectively. The Company has federal net operating loss carryforwards totaling approximately $93.4 million generated in 2018, 2017 and 2016. It also has various state net operating loss carryforwards that begin to expire in 2031. In November of 2016, the IRS commenced an audit of the Company’s 2015 Federal tax return, which was completed in 2018 (see Note 16). The Company recognizes the consolidated financial statement impact of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than–not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company is subject to income taxes in the U.S. federal jurisdiction and the states of Florida, North Carolina, New Mexico, New Jersey, California and Tennessee. The tax regulations within each jurisdiction are subject to interpretation of related tax laws and regulations and require significant judgment to apply. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 16 – Commitments and Contingencies Operating Lease Commitments The Company leases office space and business equipment for its corporate office and subsidiaries under multiple year non-cancelable operating leases that expire through 2021. The office lease agreements have certain escalation clauses and renewal options. As of September 10, 2019, the Company is in default under certain of its office leases. Additionally, the Company has lease agreements for computer equipment, office copiers and fax machines. The office space lease agreements include escalating rents over the lease term. The Company expenses rent on a straight-line basis over the lease term which commences on the date the Company has the right to control the property. The cumulative expense recognized on a straight-line basis in excess of the cumulative payments is included in Accrued Expenses in the accompanying Consolidated Balance Sheets. At December 31, 2018, future minimum lease payments under these leases are as follows: Year ending December 31, 2019 $ 730,665 2020 31,543 Total minimum future lease payments $ 762,208 Rent expense for the years ended December 31, 2018 and 2017 was $0.6 million and $0.9 million, respectively. Concentration of Credit Risk Credit risk with respect to accounts receivable is generally diversified due to the large number of patients comprising the client base. The Company does have significant receivable balances with government payers and various insurance carriers. Generally, the Company does not require collateral or other security to support customer receivables. However, the Company continually monitors and evaluates its client acceptance and collection procedures to minimize potential credit risks associated with its accounts receivable and establishes an allowance for uncollectible accounts and as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is not material to the financial statements. A number of proposals for legislation continue to be under discussion which could substantially reduce Medicare and Medicaid (CMS) reimbursements to hospitals and clinical laboratories. Depending upon the nature of regulatory action, and the content of legislation, the Company could experience a significant decrease in revenues from Medicare and Medicaid (CMS), which could have a material adverse effect on the Company. The Company is unable to predict, however, the extent to which such actions will be taken. The Company maintains its cash balances in high credit quality financial institutions. The Company’s cash balances may, at times, exceed the deposit insurance limits provided by the Federal Deposit Insurance Corp. Legal Matters From time to time, the Company may be involved in a variety of claims, lawsuits, investigations and proceedings related to contractual disputes, employment matters, regulatory and compliance matters, intellectual property rights and other litigation arising in the ordinary course of business. The Company operates in a highly regulated industry which may inherently lend itself to legal matters. Management is aware that litigation has associated costs and that results of adverse litigation verdicts could have a material effect on the Company’s financial position or results of operations. The Company’s policy is to expense legal fees and expenses incurred in connection with the legal proceedings in the period in which the expense is incurred. Management, in consultation with legal counsel, has addressed known assertions and predicted unasserted claims below. Biohealth Medical Laboratory, Inc. and PB Laboratories, LLC (the “Companies”) filed suit against CIGNA Health in 2015 alleging that CIGNA failed to pay claims for laboratory services the Companies provided to patients pursuant to CIGNA - issued and CIGNA - administered plans. In 2016, the U.S. District Court dismissed part of the Companies’ claims for lack of standing. The Companies appealed that decision to the Eleventh Circuit Court of Appeals, which in late 2017 reversed the District Court’s decision and found that the Companies have standing to raise claims arising out of traditional insurance plans as well as self-funded plans. In July 2019, the Companies and EPIC Reference Labs, Inc., filed suit against Cigna Health for failure to pay claims for laboratory services provided. Cigna Health, in turn, sued for improper billing practices. Both cases are in the early stages. The Company’s Epinex Diagnostics Laboratories, Inc. subsidiary was sued in a California state court by two former employees who alleged that they were wrongfully terminated, as well as for a variety of unpaid wage claims. The parties entered into a settlement agreement of this matter on July 29, 2016 for approximately $0.2 million, and the settlement was consummated on August 25, 2016. In October of 2016, the plaintiffs in this matter filed a motion with the court seeking payment for attorneys’ fees in the approximate amount of $0.7 million. On March 24, 2017, the court granted plaintiffs’ motion for payment of attorneys’ fees in the amount of $0.3 million, and the Company accrued this amount in its consolidated financial statements. Additionally, the Company is seeking indemnification for these amounts from Epinex Diagnostics, Inc., the seller of Epinex Diagnostic Laboratories, Inc., pursuant to a Stock Purchase Agreement entered into by and among the parties. In February 2016, the Company received notice that the Internal Revenue Service (the “IRS”) placed a lien against Medytox Solutions, Inc. and its subsidiaries relating to unpaid 2014 taxes due, plus penalties and interest, in the amount of $5.0 million. The Company paid $0.1 million toward its 2014 tax liability in March 2016. The Company filed its 2015 Federal tax return on March 15, 2016 and the accompanying election to carryback the reported net operating losses was filed in April 2016. On August 24, 2016, the lien was released, and in September of 2016 the Company received a refund from the IRS in the amount of $1.9 million. In November of 2016, the IRS commenced an audit of the Company’s 2015 Federal tax return. Based upon the audit results, the Company has made provisions of approximately $1.0 million as a liability in its financial statements as well as an estimated $0.6 million of receivables for an additional refund that it believes is due. On September 27, 2016, a tax warrant was issued against the Company by the Florida Department of Revenue (the “DOR”) for unpaid 2014 state income taxes in the approximate amount of $0.9 million, including penalties and interest. The Company has made payments to reduce the amount owed to approximately $443,000, and entered into a Stipulation Agreement with the DOR allowing the Company to make monthly installments until July 2019. As of July 2019, the remaining estimated balance of $390,000 was not paid in a lump sum. The Company intends to renegotiate another Stipulation agreement. However, there can be no assurance the Company will be successful. The remaining balance accrued of $460,089 remained outstanding to the DOR at December 31, 2018. In December of 2016, TCS-Florida, L.P. (“Tetra”), filed suit against the Company for failure to make the required payments under an equipment leasing contract that the Company had with Tetra (see Note 12). On January 3, 2017, Tetra received a Default Judgment against the Company in the amount of $2.6 million, representing the balance owed on the leases, as well as additional interest, penalties and fees. In January and February of 2017, the Company made payments to Tetra relating to this judgment aggregating to $0.7 million, and on February 15, 2017, the Company entered into a forbearance agreement with Tetra whereby the remaining $1.9 million due would be paid in 24 equal monthly installments. The Company has not maintained the payment schedule to Tetra. As a result of this default, in May 2018, Tetra and the Company agreed to dispose of certain equipment and the proceeds from the sale have been applied to the outstanding balance. The balance owed to Tetra at December 31, 2018 was $0.3 million and the Company remains in default. In December of 2016, DeLage Landen Financial Services, Inc. (“DeLage”), filed suit against the Company for failure to make the required payments under an equipment leasing contract that the Company had with DeLage (see Note 12). On January 24, 2017, DeLage received a default judgment against the Company in the approximate amount of $1.0 million, representing the balance owed on the lease, as well as additional interest, penalties and fees. The Company recognized this amount in its consolidated financial statements as of December 31, 2016. On February 8, 2017, a Stay of Execution was filed and under its terms the balance due will be paid in variable monthly installments through January of 2019, with an implicit interest rate of 4.97%. The Company and DeLage have now disposed of certain equipment and reduced the balance owed to DeLage. A balance of $0.2 million remains outstanding at December 31, 2018. On December 7, 2016, the holders of the Tegal Notes (see Note 8) filed suit against the Company seeking payment for the amounts due under the notes in the aggregate of the principal of $341,612, and accrued interest of $43,000. A request for entry of default judgment was filed on January 24, 2017. On April 23, 2018, the holders of the Tegal Notes received a judgment against the Company. To date, the Company has yet to repay this amount. In November 2017, a former shareholder of Genomas, Inc., Phenomas, LLC, filed suit against the Company for payment of a $200,000 note payable by the Company’s subsidiary, Genomas. This note is recorded in the financial statements of the subsidiary and is not payable directly from the Company. The Company has made payments totaling $120,000 against this note and agreed to a payment schedule in order to dismiss the legal action. On November 12, 2018, Phenomas, LLC filed a motion to voluntarily dismiss the suit without prejudice. The counterparty to the prepaid forward purchase agreement entered into by the Company on March 31, 2016, as amended, filed an arbitration proceeding under the agreement with regard to the outstanding balance. Subsequent to December 31, 2018, Mr. Diamantis advanced the Company $9.9 million, which was used to repay all obligations under the prepaid forward purchase agreement, as more fully discussed in Notes 8 and 21. Two former employees of the Company’s CollabRx, Inc. subsidiary have filed suits in a California state court in connection with amounts claimed to be owed under their respective employment agreements with the subsidiary. One former employee received a judgment in October 2018 for approximately $253,000. The other former employee’s claim is for approximately $110,000. The Company is considering its options to refute these matters and believes the claims to be frivolous and outside of entitlement and contractual agreements. The Company, as well as many of our subsidiaries, are defendants in a case filed in Broward County Circuit Court by TCA Global Credit Master Fund, L.P. The plaintiff alleges a breach by Medytox Solutions, Inc. of its obligations under a debenture and claims damages of approximately $2,030,000 plus interest, costs and fees. The Company and the other subsidiaries are sued as alleged guarantors of the debenture. The complaint was filed on August 1, 2018. The Company has recorded the principal balance and interest owed under the debentures agreement for the period ended December 31, 2018. The Company and all defendants have filed a motion to dismiss the complaint, but have not recorded any potential liability related to any further damages. On September 13, 2018, Laboratory Corporation of America sued EPIC Reference Labs, Inc., a subsidiary of the Company, in Palm Beach County Circuit Court for amounts claimed to be owed of approximately $148,000. The Company has recorded the amount owed in accrued expenses at December 31, 2018. The court awarded a judgment against EPIC Reference Labs, Inc. in May 2019 for approximately $155,000. In July 2019, Roche Diagnostics Corporation sued EPIC Reference Labs, Inc., in the Circuit Court for Palm Beach County claiming approximately $240,000 under an agreement to purchase laboratory supplies. This suit is in the early stages. In August 2019, EPIC Reference Labs, Inc. and Medytox Solutions, Inc. were sued by Beckman Coulter, Inc. in the same court under an agreement to purchase laboratory supplies. The plaintiff claims damages of approximately $106,000. This case is in the early stages. In July 2019, the landlord of Medytox Solutions, Inc. received a judgment in the amount of approximately $413,000 in connection with failure to pay under an office lease in West Palm Beach, Florida. In February 2018, Techlogix, Inc. received a judgment of approximately $72,000 against the Company and HTS in the Superior Court of Middlesex County Massachusetts. Following the Company’s decision to suspend operations at Jamestown Regional Medical Center in June 2019 a number of vendors remain unpaid. A number have initiated or threatened legal actions. The Company believes it will come to satisfactory arrangements with these parties as it works towards reopening the hospital. On June 10, 2019 the Company hired a new CEO to oversee the reopening of the hospital and took steps to re-enter the Medicare program. The hospital received initial approval of its application to reactivate the Medicare agreement in August and is currently planning the reopening of the hospital. Negotiations with vendors are ongoing. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 17– Segment Reporting Operating segments are defined under U.S. GAAP as components of an enterprise for which discrete financial information is available and are evaluated regularly by the enterprise’s chief operating decision maker in determining how to allocate resources and assess performance. The Company operates in two reportable business segments: ● Hospital Operations, ● Clinical Laboratory Operations The Company’s Corporate expenses reflect consolidated company wide support services such as finance, legal counsel, human resources, and payroll. The Company’s Decision Support and Informatics segment and its Supportive Software Solutions segment are now included in discontinued operations as they have been classified as held for sale as of December 31, 2018. The accounting policies of the reportable segments are the same as those described in Note 2. Selected financial information for the Company’s operating segments is as follows: Year Ended December 31, 2018 2017 Net revenues - External Clinical Laboratory Operations $ 131,014 $ 2,210,318 Hospital Operations 14,417,676 877,898 $ 14,548,690 $ 3,088,216 Loss from operations Clinical Laboratory Operations $ (2,247,499 ) $ (4,672,768 ) Hospital Operations (6,434,538 ) (4,800,539 ) Corporate (4,542,583 ) (6,602,800 ) $ (13,224,620 ) $ (16,076,107 ) Depreciation and amortization Clinical Laboratory Operations $ 764,445 $ 1,639,954 Hospital Operations 498,352 73,985 Corporate 1,047 1,382 $ 1,263,844 $ 1,715,321 Capital expenditures Clinical Laboratory Operations $ - $ - Hospital Operations 213,105 1,422,002 $ 213,105 $ 1,422,002 Year Ended December 31, 2018 2017 Total assets Clinical Laboratory Operations $ 271,426 $ 1,503,520 Hospital Operations 13,568,933 2,549,504 Corporate 2,707,416 3,436,773 Assets of AMSG and HTS classified as held for sale 152,171 255,566 Eliminations (2,500,646 ) (1,454,570 ) $ 14,199,300 $ 6,290,794 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 18 – Discontinued Operations On July 12, 2017, the Company announced plans to spin off AMSG and in the third quarter of 2017, the Company’s Board of Directors voted unanimously to spin off the Company’s wholly-owned subsidiary, Health Technology Solutions, Inc. (“HTS”), as independent publicly traded companies by way of tax-free distributions to the Company’s stockholders. While these spin offs have taken longer than anticipated, completion of these spin offs is now expected to occur in the first quarter of 2020. The spin offs are subject to numerous conditions, including effectiveness of Registration Statements on Form 10 to be filed with the Securities and Exchange Commission, and consents, including under various funding agreements previously entered into by the Company. A record date to determine those stockholders entitled to receive shares in the spin offs should be approximately 30 to 60 days prior to the dates of the spin offs. The strategic goal of the spin offs is to create three public companies, each of which can focus on its own strengths and operational plans. In accordance with ASC 205-20 and having met the criteria for “held for sale”, as the Company reached this decision prior to December 31, 2017, the Company has reflected amounts relating to AMSG and HTS as disposal groups classified as held for sale and included as part of discontinued operations. Prior to being classified as “held for sale,” AMSG had been the Company’s Decision Support and Informatics segment, except for the Company’s subsidiary, Alethea Laboratories, Inc., which had been included in the Clinical Laboratory Operations segment and now is part of AMSG, and HTS had been the Company’s Supportive Software Solutions segment. Segment operation disclosures in Note 17 no longer include amounts relating to AMSG and HTS following the reclassification to discontinued operations. Carrying amounts of major classes of assets and liabilities classified as held for sale and included as part of discontinued operations in the consolidated balance sheets as of December 31, 2018 and 2017 consisted of the following: AMSG Assets and Liabilities: December 31, 2018 December 31, 2017 Cash $ 4,471 $ 9,273 Accounts receivable, net 6,838 19,022 Prepaid expenses and other current assets 25,477 25,477 Current assets classified as held for sale $ 36,786 $ 53,772 Property and equipment, net $ - $ - Deposits - - Non-current assets classified as held for sale $ - $ - Accounts payable (includes related parties) $ 532,858 $ 671,561 Accrued expenses 418,932 375,165 Current portion of notes payable 278,836 249,589 Current liabilities classified as held for sale $ 1,230,626 $ 1,296,315 Non-current liabilities classified as held for sale $ - $ - HTS Assets and Liabilities: December 31, 2018 December 31, 2017 Cash $ 2,523 $ 8,281 Accounts receivable, net 90,743 160,715 Prepaid expenses and other current assets 10,300 3,964 Current assets classified as held for sale $ 103,566 $ 172,960 Property and equipment, net $ 5,790 $ 21,078 Deposits 6,029 7,756 Non-current assets classified as held for sale $ 11,819 $ 28,834 Accounts payable (includes related parties) $ 546,969 $ 407,404 Accrued expenses 520,251 269,135 Current liabilities classified as held for sale $ 1,067,220 $ 676,539 Consolidated Discontinued Operations Assets and Liabilities: December 31, 2018 December 31, 2017 Cash $ 6,994 $ 17,554 Accounts receivable, net 97,581 179,737 Prepaid expenses and other current assets 35,777 29,441 Current assets classified as held for sale $ 140,352 $ 226,732 Property and equipment, net $ 5,790 $ 21,078 Deposits 6,029 7,756 Non-current assets classified as held for sale $ 11,819 $ 28,834 Accounts payable (includes related parties) $ 1,079,827 $ 1,078,965 Accrued expenses 939,183 644,300 Current portion of notes payable 278,836 249,589 Current liabilities classified as held for sale $ 2,297,846 $ 1,972,854 Major line items constituting loss from discontinued operations in the consolidated statements of operations for the years ended December 31, 2018 and 2017 consisted of the following: AMSG Income (Loss) from Discontinued Operations: Year Ended December 31, 2018 2017 Revenue from services $ 102,991 $ 283,460 Cost of services 38,299 12,575 Gross profit 64,692 270,885 Operating expenses 480,436 2,525,110 Gain on sale of stock (800,000 ) - Other expense 1,049 46,859 Provision for income taxes - - Income (loss) from Discontinued Operations: $ 383,207 $ (2,301,084 ) HTS Loss from Discontinued Operations: Year Ended December 31, 2018 2017 Revenue from services (**) $ 1,419,494 $ 1,650,109 Cost of services 123,721 168,274 Gross profit 1,295,773 1,481,835 Operating expenses 2,108,880 3,402,860 Other expense 4,943 54,809 Provision for income taxes - - Loss from Discontinued Operations: $ (818,050 ) $ (1,975,834 ) **Revenue from services, includes related party revenue of $0.7 million and $0.7 million, respectively Consolidated Loss from Discontinued Operations: Year Ended December 31, 2018 2017 Revenue from services $ 1,522,485 $ 1,933,569 Cost of services 162,020 180,849 Gross profit 1,360,465 1,752,720 Operating expenses 2,589,316 5,927,970 Gain on sale of stock (800,000 ) - Other expense 5,992 101,668 Provision for income taxes - - Loss from Discontinued Operations: $ (434,843 ) $ (4,276,918 ) Acquisition of Genomas, Inc. on September 27, 2017 On September 29, 2016, the Company announced that it had entered into a Stock Purchase Agreement (the “Purchase Agreement”) to acquire the remaining outstanding equity securities of Genomas, Inc. (“Genomas”) that the Company did not already own, representing approximately 85% of the outstanding equity interests in Genomas, for 1,750,000 shares of the Company’s newly - designated Series F Preferred Stock. (The Series F Preferred Stock is more fully described in Note 14 and below.) Genomas is a biomedical company that develops PhyzioType Systems for DNA-guided management and prescription of drugs used to treat mental illness, pain, heart disease, and diabetes. The Company had previously announced that on July 19, 2016 it acquired approximately 15% of the outstanding equity of Genomas from Hartford Healthcare Corporation (“Hartford”), along with approximately $1.5 million of notes payable to Hartford and certain rights to and license participation in technology that is used by Genomas, for $250,000 in cash. The closing of this acquisition under the Purchase Agreement, which was subject to, among other things, receipt of regulatory and licensure approvals as well as other customary closing conditions, did not occur until September 27, 2017. As a result of delays in the closing of the transaction, the Company expensed all amounts previously paid to the company aggregating $1.0 million during the fourth quarter of 2016, including outstanding advances to Genomas in the amount of $0.4 million. Genomas will be spun-off as part of AMSG, so it is presented here in discontinued operations. The Series F Preferred Stock issued effective September 27, 2017 has an aggregate stated value of $1,750,000, and is convertible into shares of the Company’s common stock at any time after the one-year anniversary of the closing date at a conversion price per common share equal to the greater of $14,625 or the average closing sales price of the Company’s common stock for the 10 trading days immediately preceding the conversion. The maximum number of common shares issuable upon the conversion of the Series F Preferred Stock is 120. The Company valued the Series F Preferred Stock based on the value of the common stock issuable upon conversion on the date of the acquisition, which was $174,097. The following table summarizes the fair values of assets acquired and liabilities assumed at the acquisition date of Genomas. See the discussion below regarding the impairment of the goodwill acquired. Cash $ 7,990 Accounts receivable, net 6,503 Accounts payable and accrued expenses (458,736 ) Deferred revenue (20,000 ) Loans payable short-term (142,514 ) Note payable long-term (134,118 ) Total identifiable net liabilities (740,875 ) Goodwill 914,972 Total consideration $ 174,097 During the fourth quarter of 2017, the Company determined that the goodwill acquired in the Genomas acquisition was impaired and, accordingly, it recorded an impairment charge of $914,972 in the discontinued operations of AMSG for the year ended December 31, 2017. |
Supplemental Disclosure of Cash
Supplemental Disclosure of Cash Flow Information | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosure of Cash Flow Information | Note 19 – Supplemental Disclosure of Cash Flow Information Year Ended December 31, 2018 2017 Cash paid for interest $ 313,918 $ 1,200,759 Cash paid for income taxes $ 23,362 $ 541,313 Acquisition of Jamestown Regional Medical Center: Inventory $ 450,682 $ - Prepaid and other assets 310,385 - Property and equipment 7,129,484 - Intangible assets 504,806 - Accrued expenses (193,966 ) - Non-cash investing and financing activities: Cashless exercise of warrants 4,619,150 - Exchange of debentures for Series I-2 Preferred Stock 3,127,556 - Note payable and accrued expenses settled through issuance of Series J Preferred Stock 250,000 - Common stock issued for conversion of Series I-2 Preferred Stock 1,513,105 - Beneficial conversion feature 192,308 Services and severance settled through the issuances of common stock - 161,003 Exchange of convertible debentures for convertible debentures and warrants - 10,734,336 Series F Preferred Stock issued for business acquisition - 174,097 Notes payable and warrants settled through issuance of common stock - 440,000 Convertible debentures issued in exchange for Series H Preferred Stock - 2,695,760 Debentures converted into common stock 8,128,044 7,306,314 Deemed dividend for trigger of down round provision feature 231,843,826 53,341,619 Conversions of preferred stock into common stock - 7,785,000 Value of convertible liabilities - 12,435,250 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 20 – Recent Accounting Pronouncements Accounting Pronouncements Adopted In July 2017, the FASB issued ASU 2017-11 “ Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815).” Effective January 1, 2018, the Company adopted ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02 , Leases (Topic 842) In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In February 2018, the FASB issued ASU 2018-03; Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In March 2018, the FASB issued ASU 2018-05; “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update)” In June 2018, the FASB issued ASU 2018-07 to expand the scope of ASC Topic 718, Compensation - Stock Compensation In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Other recent accounting standards issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 21 – Subsequent Events Asset Acquisitions of Jellico Community Hospital and CarePlus Center On March 5, 2019, the Company closed an asset purchase agreement (the “Purchase Agreement”) whereby it acquired certain assets related to an acute care hospital located in Jellico, Tennessee and an outpatient clinic located in Williamsburg, Kentucky. The hospital is known as Jellico Community Hospital and the clinic is known as the CarePlus Center. The hospital and the clinic and their associated assets were acquired from Jellico Community Hospital, Inc. and CarePlus Rural Health Clinic, LLC, respectively. Jellico Community Hospital is a fully operational 54-bed acute care facility that offers comprehensive services, including diagnostic imaging, radiology, surgery (general, gynecological and vascular), nuclear medicine, wound care and hyperbaric medicine, intensive care, emergency care and physical therapy. The CarePlus Center offers sophisticated testing capabilities and compassionate care, all in a modern, patient-friendly environment. Services include diagnostic imaging services, x-ray, mammography, bone densitometry, computed tomography (CT), ultrasound, physical therapy and laboratory services on a walk-in basis. The purchase price was approximately $658,537. This purchase price was made available by Christopher Diamantis, a director of the Company. Diligence, legal and other costs associated with the acquisition are estimated to be approximately $250,000, meaning the total cost of acquisition to the Company is approximately $908,000. Annual net revenues in recent years have been approximately $12,000,000, with government payors, including Medicare and Medicaid, accounting for in excess of 70% of the payor mix. The Company does not expect that payor mix to change in the near future. Accounts Receivable Financing (Prepaid Forward Purchase Contract) and Loans From Mr. Diamantis Subsequent to December 31, 2018, Mr. Diamantis advanced the Company $9.9 million, which was used to repay obligations under a prepaid forward purchase contract related to an accounts receivable financing, as more fully discussed in Note 8. In addition Mr. Diamantis loaned the Company $6.5 million, of which $1.9 million was used for fees and expenses incurred in connection with the settlement of the prepaid forward purchase contract, $0.7 million was used to purchase Jellico Community Hospital in March 2019 and the remainder was used for working capital purposes. Subsequent to December 31, 2018, the Company incurred interest of $1.5 million on the loans from Mr. Diamantis and the Company repaid Mr. Diamantis $1.5 million of accrued interest. 2019 Debenture Offerings The Company issued debentures on February 24, 2019 in the aggregate principal amount of $300,000, on March 27, 2019 in the aggregate principal amount of $300,000 and on May 12, 2019 in the aggregate principal amount of $500,000. All of these debentures were guaranteed by Mr. Diamantis, a director of the Company, and were due on June 3, 2019. In addition, the Company issued debentures on June 5, 2019 in the aggregate principal amount of $125,000 and on June 7, 2019 in the aggregate principal amount of $200,000. These debentures were also guaranteed by Mr. Diamantis and were due on July 20, 2019. On June 13, 2019, the Company closed an offering of $1,250,000 aggregate principal amount of debentures with certain existing institutional investors pursuant to the terms of a Bridge Debenture Agreement, dated as of June 13, 2019 ( the “June 13 Agreement”) and received proceeds of $1,250,000. The June 13 Agreement provided that on or prior to June 30, 2019, at the mutual election of the Company and the investors, the investors could purchase an additional $1,250,000 principal amount on the same terms and conditions as provided in the June 13 Agreement. Under the June 13 Agreement, the maturity dates of the debentures issued on February 24, 2019, March 27, 2019, May 12, 2019, June 5, 2019 and June 7, 2019 were extended to December 31, 2019 and the terms were changed such that they have the same interest terms as contained in the June 13, 2019 debentures, as more fully discussed below. On June 21, 2019, the Company and the investors agreed that the Company would issue, and the investors would purchase, $250,000 principal amount of debentures and on June 24, 2019 the Company and the investors agreed that the Company would issue, and the investors would purchase, an additional $1,020,000 aggregate principal amount of debentures. In connection with the issuances of the June 21, 2019 and June 24, 2019 debentures, the Company received total proceeds of $1,270,000. The June 13, 2019, June 21, 2019 and June 24, 2019 debentures (collectively, “the June 2019 Debentures”) are secured and guaranteed by the Company’s subsidiaries on the same terms as provided in the Purchase Agreement, dated as of August 31, 2017, which is more fully described in Note 9. At the Company’s option, the June 2019 Debentures may also be exchanged for shares of the Company’s Series I-2 Convertible Preferred Stock under the terms of the previously-announced Exchange Agreement, dated as of October 30, 2017. Commencing on August 17, 2019, the June 2019 Debentures shall bear interest on the outstanding principal amount at a rate of 2.5% per month (increasing to 5% per month on October 12, 2019), payable quarterly beginning on October 1, 2019. All overdue accrued and unpaid interest shall entail a late fee equal to the lesser of 24% per annum or the maximum rate permitted by applicable law. Christopher Diamantis is a guarantor of the June 2019 Debentures. The total proceeds received from the issuances of the debentures noted above were $3.8 million. Modification of Warrants On March 27, 2019, the expiration date of the Series B warrants issued in March 2017 and September 2017 were extended from June 2019 to September 2019. On May 12, 2019, the expiration date of these warrants was further extended to March 31, 2022. The Company used the Black Scholes model to calculate the fair value of the warrants as of the modification date. Using the pre-modification term and related assumptions, and the post-modification terms and related assumptions, the Company determined that the change in fair value of the warrants as a result of these modifications was $9.5 million, which will be recorded as interest expense. Issuance of Common Stock Subsequent to December 31, 2018 and through September 10, 2019, the Company issued an aggregate of 7,380,369,502 shares of common stock for conversions of preferred stock and the cashless exercise of warrants. The following table presents the dilutive effect of our various potential common shares as of September 10, 2019: September 10, 2019 Common shares outstanding 7,508,936,775 Dilutive potential shares: Stock options 77 Warrants 634,525,355,377 Convertible debt 30,570,395,193 Convertible preferred stock 83,791,788,355 Total dilutive potential common shares, including outstanding common stock 756,396,475,777 On October 4 , 2019, Jamestown Regional Medical Center. Medicare Agreement; Following an inspection at Jamestown Regional Medical Center on February 5, 2019, the hospital was informed on February 15 that several conditions of participation in its Medicare agreement were deficient. The hospital was informed that if the deficiencies where not corrected by May 16 the Medicare agreement would terminate. A follow-up inspection on May 15 resulted in the determination that the hospital had failed to adequately correct the deficiencies highlighted and a notice of involuntary termination was issued that was effective on June 12, 2019. A significant percentage of patients at Jamestown Regional Medical Center are covered by Medicare and without any ability to get paid for these services the Company suspended operations at the hospital. On June 10, 2019 the Company hired a new CEO to oversee the reopening of the hospital and took steps to re-enter the Medicare program. The hospital received initial approval of its application to reactivate the Medicare agreement in August and is currently planning the reopening of the hospital. Accounts Receivable Factoring Arrangements Subsequent to December 31, 2018 and through September 10, 2019, the Company entered into five accounts receivable factoring arrangements. The aggregate amount of accounts receivable sold on a non-recourse basis, was $3.9 million. The aggregate purchase price paid to the Company was $2.7 million, less $0.1 million of origination fees. As of September 10, 2019, $1.7 million was outstanding and owed to the factors under these arrangements. Promissory Note On September 27, 2019, the Company issued a promissory note to a lender in the principal amount of $1.9 million and received proceeds of $1.6 million. The first principal payment of $1.0 million is due on or before November 8, 2019 and the remaining $0.9 million is due on or before December 26, 2019. The note does not bear interest except upon the occurrence of an event of default (as defined in the note). The note is unsecured and is guaranteed by Mr. Diamantis. Past Due Debentures The Company had $1,984,000 principal amount of March Debentures issued March 21, 2017 and due on March 21, 2019 outstanding on the maturity date. These debentures have not been paid and remain outstanding, accruing interest at the default rate of 18% per annum. Per the terms of the debentures, the Company accrued a default penalty of approximately $0.6 million during the three months ended March 31, 2019. The Company had $17,050,000 principal amount of debentures due September 19, 2019 outstanding on the maturity date. These debentures have not been paid and remain outstanding, accruing interest at the default rate of 18% per annum. In addition, the Company will incur a default penalty of approximately $5.1 million during the three months ended September 30, 2019 as a result of the payment default. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The consolidated financial statements have been prepared in accordance with U.S. GAAP and in accordance with Regulation S-X of the SEC. The consolidated financial statements include the accounts of Rennova Health, Inc. and its wholly-owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications The Company has reclassified certain amounts in the 2017 consolidated financial statements to be consistent with the 2018 presentation. These principally relate to reclassification of bad debt, which is now presented as a reduction of revenue, as well as the balance sheet classification of derivative liabilities. The reclassifications had no impact on operations or cash flows for the year ended December 31, 2017. |
Comprehensive Loss | Comprehensive Loss During the years ended December 31, 2018 and 2017, comprehensive loss was equal to the net loss amounts presented in the accompanying consolidated statements of operations. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions include the estimates of fair values of assets acquired and liabilities assumed in business combinations, including hospital acquisitions, reserves and write-downs related to receivables and inventories, the recoverability of long-lived assets, stock based compensation, the valuation allowance relating to the Company’s deferred tax assets, valuation of equity and derivative instruments, deemed dividends and debt discounts, among others. Actual results could differ from those estimates and would impact future results of operations and cash flows. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. The Company had minimal cash equivalents at December 31, 2018 and 2017. |
Revenue Recognition | Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “ Revenue from Contracts with Customers (Topic 606),” Hospital Operations Our revenues generally relate to contracts with patients in which our performance obligations are to provide health care services to the patients. Revenues are recorded during the period our obligations to provide health care services are satisfied. Our performance obligations for inpatient services are generally satisfied over periods that average approximately five days, and revenues are recognized based on charges incurred in relation to total expected charges. Our performance obligations for outpatient services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges. Medicare generally pays for inpatient and outpatient services at prospectively determined rates based on clinical, diagnostic and other factors. Services provided to patients having Medicaid coverage are generally paid at prospectively determined rates per discharge, per identified service or per covered member. Agreements with commercial insurance carriers, managed care and preferred provider organizations generally provide for payments based upon predetermined rates per diagnosis, per diem rates or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals. Our revenues are based upon the estimated amounts we expect to be entitled to receive from patients and third-party payers. Estimates of contractual allowances under managed care and commercial insurance plans are based upon the payment terms specified in the related contractual agreements. Revenues related to uninsured patients and uninsured copayment and deductible amounts for patients who have health care coverage may have discounts applied (uninsured discounts and contractual discounts). We also record estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record self-pay revenues at the estimated amounts we expect to collect. Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation. Estimated reimbursement amounts are adjusted in subsequent periods as cost reports are prepared and filed and as final settlements are determined (in relation to certain government programs, primarily Medicare, this is generally referred to as the “cost report” filing and settlement process). There were no adjustments to estimated Medicare and Medicaid reimbursement amounts and disproportionate-share funds related primarily to cost reports filed during 2018 and 2017. The Emergency Medical Treatment and Labor Act (“EMTALA”) requires any hospital participating in the Medicare program to conduct an appropriate medical screening examination of every person who presents to the hospital’s emergency room for treatment and, if the individual is suffering from an emergency medical condition, to either stabilize the condition or make an appropriate transfer of the individual to a facility able to handle the condition. The obligation to screen and stabilize emergency medical conditions exists regardless of an individual’s ability to pay for treatment. Federal and state laws and regulations require, and our commitment to providing quality patient care encourages, us to provide services to patients who are financially unable to pay for the health care services they receive. The federal poverty level is established by the federal government and is based on income and family size. The Company considers the poverty level in determining whether patients qualify for free or reduced cost of care. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in revenues. We provide discounts to uninsured patients who do not qualify for Medicaid or charity care. In implementing the uninsured discount policy, we may first attempt to provide assistance to uninsured patients to help determine whether they may qualify for Medicaid, other federal or state assistance, or charity care. If an uninsured patient does not qualify for these programs, the uninsured discount is applied. The collection of outstanding receivables for Medicare, Medicaid, managed care payers, other third-party payers and patients is our primary source of cash and is critical to our operating performance. The primary collection risks relate to uninsured patient accounts, including patient accounts for which the primary insurance carrier has paid the amounts covered by the applicable agreement, but patient responsibility amounts (deductibles and copayments) remain outstanding. Implicit price concessions relate primarily to amounts due directly from patients. Estimated implicit price concessions are recorded for all uninsured accounts, regardless of the aging of those accounts. Accounts are written off when all reasonable internal and external collection efforts have been performed. The estimates for implicit price concessions are based upon management’s assessment of historical write offs and expected net collections, business and economic conditions, trends in federal, state and private employer health care coverage and other collection indicators. Management relies on the results of detailed reviews of historical write-off’s and collections at facilities that represent a majority of our revenues and accounts receivable (the “hindsight analysis”) as a primary source of information in estimating the collectability of our accounts receivable. We perform the hindsight analysis quarterly, utilizing rolling twelve-months accounts receivable collection and write off data. We believe our quarterly updates to the estimated contractual allowance amounts at each of our hospital facilities provide reasonable estimates of our revenues and valuations of our accounts receivable. At December 31, 2018 and 2017, estimated contractual allowances of $63 million and $7.0 million, respectively, had been recorded as reductions to our accounts receivable balances to enable us to record our revenues and accounts receivable at the estimated amounts we expect to collect. To quantify the total impact of the trends related to uninsured accounts, we believe it is beneficial to view total uncompensated care, which is comprised of charity care, uninsured discounts and implicit price concessions. Total uncompensated care as a percentage of gross revenues was 11% and 18% for the years ended December 31, 2018 and 2017, respectively. Clinical Laboratory Operations. Laboratory testing services include chemical diagnostic tests such as blood analysis and urine analysis. Laboratory service revenues are recognized at the time the testing services are performed and billed and are reported at their estimated net realizable amounts. Net service revenues are determined utilizing gross service revenues net of contractual adjustments and discounts. Even though it is the responsibility of the patient to pay for laboratory service bills, most individuals in the U.S. have an agreement with a third-party payer such as a commercial insurance provider, Medicaid or Medicare to pay all or a portion of their healthcare expenses; most of the services provided by us are to patients covered under a third-party payer contract. In most cases, the Company is provided the third-party billing information and seeks payment from the third party in accordance with the terms and conditions of the third-party payer for health service providers like us. Each of these third-party payers may differ not only in terms of rates, but also with respect to terms and conditions of payment and providing coverage (reimbursement) for specific tests. Estimated revenues are established based on a series of procedures and judgments that require industry specific healthcare experience and an understanding of payer methods and trends. Despite follow up billing efforts, the Company does not currently anticipate collection of a significant portion of self-pay billings, including the patient responsibility portion of the billing for patients covered by third party payers. The Company currently does not have any capitated agreements. In applying the new revenue standard, (“ASU”) 2014-09, “ Revenue from Contracts with Customers (Topic 606), We review our calculations for the realizability of gross service revenues monthly to make certain that we are properly allowing for the uncollectable portion of our gross billings and that our estimates remain sensitive to variances and changes within our payer groups. The contractual allowance calculation is made based on historical allowance rates for the various specific payer groups monthly with a greater weight being given to the most recent trends; this process is adjusted based on recent changes in underlying contract provisions. This calculation is routinely analyzed by us based on actual allowances issued by payers and the actual payments made to determine what adjustments, if any, are needed. Total gross revenues for Hospital and Clinical Laboratory Operations were reduced by approximately $9.4 million and $1.5 million for bad debt for the years ended December 31, 2018 and 2017, respectively. As required by the new standard, after bad debt and contractual and related allowance adjustments to revenues of $73.5 million and $20.9 million, for the years ended December 31, 2018 and 2017, respectively, we reported net revenues of $14.5 million and $3.1 million. We continue to review the provision for bad debt and contractual and related allowances. |
Contractual Allowances and Doubtful Accounts Policy | Contractual Allowances and Doubtful Accounts Policy Accounts receivable are reported at realizable value, net of allowances for credits and doubtful accounts, which are estimated and recorded in the period the related revenue is recorded. The Company has a standardized approach to estimating and reviewing the collectability of its receivables based on a number of factors, including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation process related to allowances for contractual credits and doubtful accounts. In addition, the Company regularly assesses the state of its billing operations in order to identify issues which may impact the collectability of these receivables or reserve estimates. Receivables deemed to be uncollectible are charged against the allowance for doubtful accounts at the time such receivables are written-off. Recoveries of receivables previously written-off are recorded as credits to the allowance for doubtful accounts. Revisions to the allowances for doubtful accounts estimates are recorded as an adjustment to provision for bad debts. See Note 4 – Accounts Receivable. |
Impairment or Disposal of Long-Lived Assets | Impairment or Disposal of Long-Lived Assets The Company accounts for the impairment or disposal of long-lived assets according to the FASB ASC Topic 360, Property, Plant and Equipment |
Derivative Financial Instruments and Fair Value, Including the Adoption of ASU 2017-11 | Derivative Financial Instruments and Fair Value, Including the Adoption of ASU 2017-11 We account for warrants issued in conjunction with the issuance of common stock and certain convertible debt instruments in accordance with the guidance contained in ASC Topic 815, Derivatives and Hedging Distinguishing Liabilities from Equity In July 2017, the FASB issued ASU 2017-11 “Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815).” The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. Under current GAAP, an equity-linked financial instrument with a down round feature that otherwise is not required to be classified as a liability under the guidance in Topic 480 is evaluated under the guidance in Topic 815, Derivatives and Hedging, to determine whether it meets the definition of a derivative. If it meets that definition, the instrument (or embedded feature) is evaluated to determine whether it is indexed to an entity’s own stock as part of the analysis of whether it qualifies for a scope exception from derivative accounting. Generally, for warrants and conversion options embedded in financial instruments that are deemed to have a debt host (assuming the underlying shares are readily convertible to cash or the contract provides for net settlement such that the embedded conversion option meets the definition of a derivative), the existence of a down round feature results in an instrument not being considered indexed to an entity’s own stock. This results in a reporting entity being required to classify the freestanding financial instrument or the bifurcated conversion option as a liability, which the entity must measure at fair value initially and at each subsequent reporting date. The amendments in this Update revise the guidance for instruments with down round features in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception from derivative accounting. An entity still is required to determine whether instruments would be classified in equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do qualify, freestanding instruments with down round features are no longer classified as liabilities and embedded conversion options with down round features are no longer bifurcated. For entities that present EPS in accordance with Topic 260, and when the down round feature is included in an equity-classified freestanding financial instrument, the value of the effect of the down round feature is treated as a dividend when it is triggered and as a numerator adjustment in the basic EPS calculation. This reflects the occurrence of an economic transfer of value to the holder of the instrument, while alleviating the complexity and income statement volatility associated with fair value measurement on an ongoing basis. Convertible instruments are unaffected by the Topic 260 amendments in this Update. Those amendments in Part I of this Update are a cost savings relative to current GAAP. This is because, assuming the required criteria for equity classification in Subtopic 815-40 are met, an entity that issued such an instrument no longer measures the instrument at fair value at each reporting period (in the case of warrants) or separately accounts for a bifurcated derivative (in the case of convertible instruments) on the basis of the existence of a down round feature. For convertible instruments with embedded conversion options that have down round features, applying specialized guidance such as the model for contingent beneficial conversion features rather than bifurcating an embedded derivative also reduces cost and complexity. Under that specialized guidance, the issuer recognizes the intrinsic value of the feature only when the feature becomes beneficial instead of bifurcating the conversion option and measuring it at fair value each reporting period. The amendments in Part II of this Update replace the indefinite deferral of certain guidance in Topic 480 with a scope exception. This has the benefit of improving the readability of the Codification and reducing the complexity associated with navigating the guidance in Topic 480. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part 1 of this Update should be applied in either of the following ways: 1. Retrospectively to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective; or 2. Retrospectively to outstanding financial instruments with a down round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company has determined that this amendment had a material impact on its consolidated financial statements and has early adopted this accounting standard update. The cumulative effect of the adoption of ASU 2017-11 resulted in the reclassification of the derivative liability recorded of $56 million and the reversal of $41 million of interest expense recorded in the Company’s first fiscal quarter of 2017. The remaining $15 million was offset to additional paid in capital (discount on convertible debenture). Additionally, the Company recognized a deemed dividend from the trigger of the down round provision feature of $53.3 million. A $51 million deemed dividend was recorded retrospectively as of the beginning of the issuance of the debentures issued in March 2017 where the initial derivative liability was recorded as a result of the down round provision feature. A deemed dividend of $231.8 million was recorded during 2018 as a result of down round provision features. See Note 11 for an additional discussion of derivative financial instruments. |
Stock Based Compensation | Stock Based Compensation The Company accounts for Stock-Based Compensation under ASC 718 “ Compensation – Stock Compensation The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, “ Equity-Based Payments to Non-Employees The Company issues stock to consultants for various services. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete. The Company recognizes consulting expense and a corresponding increase to additional paid-in-capital related to stock issued for services. |
Income Taxes | Income Taxes Income taxes are accounted for under the liability method of accounting for income taxes. Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled. The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs. Future income tax assets are recognized to the extent that they are considered more likely than not to be realized. When projected future taxable income is insufficient to provide for the realization of deferred tax assets, the Company recognizes a valuation allowance (see Note 15). In accordance with U.S. GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Derecognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets. Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of December 31, 2018 and 2017. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The Company reports earnings (loss) per share in accordance with ASC Topic 260, “Earnings Per Share,” which establishes standards for computing and presenting earnings per share. Basic earnings (loss) per share of common stock is calculated by dividing net earnings (loss) allocable to common shareholders by the weighted-average shares of common stock outstanding during the period, without consideration of common stock equivalents. Diluted earnings (loss) per share is calculated by adjusting the weighted-average shares of common stock outstanding for the dilutive effect of common stock equivalents, including stock options and warrants outstanding for the period as determined using the treasury stock method. For purposes of the diluted net loss per share calculation, common stock equivalents are excluded from the calculation when their effect would be anti-dilutive. Therefore, basic and diluted net loss per share applicable to common shareholders is the same for periods with a net loss. See Note 3 for the computation of loss per share for the years ended December 31, 2018 and 2017. |
Segment Information | Segment Information In accordance with the provisions of ASC 280-10, “ Disclosures about Segments of an Enterprise and Related Information |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table sets forth the computation of the Company’s basic and diluted net loss per share during the years ended December 31, 2018 and 2017: Year Ended December 31, 2018 2017 Numerator Net loss from continuing operations $ (13,587,512 ) $ (50,921,024 ) Deemed dividend from trigger of down round provision feature (231,843,826 ) (53,341,619 ) Net loss attributable to common stockholders, continuing operations $ (245,431,338 ) $ (104,262,643 ) Net loss from discontinued operations $ (434,843 ) $ (4,276,918 ) Net loss available to common stockholders $ (245,866,181 ) $ (108,539,561 ) Denominator Basic and diluted weighted average common shares outstanding 10,022,180 4,616 Loss per share, basic and diluted Basic and diluted, continuing operations $ (24.49 ) $ (22,587.23 ) Basic and diluted, discontinued operations $ (0.04 ) $ (926.54 ) Total basic and diluted $ (24.53 ) $ (23,513.77 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Diluted loss per share excludes all dilutive potential shares if their effect is anti-dilutive. As of December 31, 2018 and 2017, the following potential common stock equivalents were excluded from the calculation of diluted loss per share as their effect was anti-dilutive: Year Ended December 31, 2018 2017 Warrants 53,130,510,439 4,352,806 Convertible preferred stock 7,863,880,588 359,563 Convertible debentures 2,179,779,002 653,839 Stock options 77 77 63,174,170,106 5,366,285 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable at December 31, 2018 and 2017 consisted of the following: December 31, 2018 2017 Accounts receivable - Clinical Laboratory Operations $ 622,009 $ 1,478,451 Accounts receivable - Hospital Operations 31,607,644 8,593,747 Total accounts receivable 32,229,653 10,072,198 Less: Allowance for discounts - Clinical Laboratory Operations (573,584 ) (1,177,054 ) Allowance for discounts - Hospital Operations (25,066,799 ) (6,936,429 ) Allowance for bad debts (2,777,521 ) (987,403 ) Accounts receivable, net $ 3,811,749 $ 971,312 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment at December 31, 2018 and 2017 consisted of the following: December 31, 2018 December 31, 2017 Medical equipment $ 1,946,000 $ 696,195 Land 550,700 - Building 6,482,260 1,359,472 Equipment 437,029 476,548 Equipment under capital leases 742,745 4,686,736 Furniture 244,828 222,824 Leasehold improvements 1,303,131 1,303,131 Vehicles 56,624 196,534 Computer equipment 224,447 226,441 Software 724,126 631,033 12,711,890 9,798,914 Less accumulated depreciation (4,184,986 ) (7,103,474 ) Property and equipment, net $ 8,526,904 $ 2,695,440 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilites Assumed | The following table shows the allocation of the purchase price of Jamestown Regional Medical Center to the acquired identifiable assets acquired, and liabilities assumed: Total purchase price $ 635,096 Tangible and intangible assets acquired, and liabilities assumed at estimated fair value: Cash $ 375 Inventories 450,682 Prepaids and deposits 310,385 Property and equipment 7,129,484 Intangible assets 504,806 Accrued expenses (193,966 ) Net tangible and intangible assets acquired $ 8,201,766 Gain on bargain purchase $ 7,566,670 |
Schedule of Intangible Assets Acquisition | The intangible assets acquired in the Jamestown acquisition consisted of the following at December 31, 2018: Acquired in 2018 Life Impairment in 2018 Amortization for the December 31, 2018 Carrying Value December 31, 2018 Certificate of need $ 259,443 Infinite $ - $ - $ 259,443 Non-compete 245,363 2 yrs. (173,799 ) (71,564 ) - Total intangibles $ 504,806 $ (173,799 ) $ (71,564 ) $ 259,443 |
Schedule of Impaired Asset of Operations Results | As noted in the table above, we fully impaired the non-compete intangible asset acquired in the acquisition of Jamestown Regional Medical Center at December 31, 2018. We determined that this asset was impaired primarily due to the operating results of Jamestown Regional Medical Center since the acquisition on June 1, 2018, which were as follows: For the Period June 1, 2018 December 31, 2018 Net Revenue $ 7,898,222 Net Loss $ (2,022,380 |
Schedule of Unaudited Pro-forma of Results of Operations | The following presents the unaudited pro-forma combined results of operations of the Company and Jamestown Regional Medical Center as if the acquisition had occurred on January 1, 2017. Year Ended December 31, 2018 2017 (unaudited) Net revenue $ 19,983,266 $ 19,446,732 Net loss from continuing operations (15,720,672 ) (55,305,325 ) Net loss (16,155,515 ) (59,582,243 ) Deemed dividend from trigger of down round provision feature (231,843,826 ) (53,341,619 ) Net loss to common stockholders $ (247,999,341 ) $ (112,923,862 ) Net loss per common share: Basic and diluted continuing operations $ (24.70 ) $ (23,537.03 ) Basic and diluted net loss to common stockholders $ (24.75 ) $ (24,463.57 ) |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses at December 31, 2018 and 2017 consisted of the following: December 31, 2018 December 31, 2017 Commissions payable $ 19,113 $ 24,470 Sales tax payable 8,016 - Accrued payroll and related liabilities 3,400,052 897,088 Accrued property tax 47,396 - Accrued interest 5,464,837 2,636,057 Other accrued expenses 1,771,867 1,409,790 Accrued expenses $ 10,711,281 $ 4,967,405 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes Payable – Third Parties December 31, 2018 December 31, 2017 Loan payable under prepaid forward purchase contract $ 5,000,000 $ 5,000,000 Loan payable to TCA Global Master Fund, LP (“TCA”) in the original principal amount of $3 million at 16% interest (the “TCA Debenture”). Principal and interest payments due in various installments through December 31, 2017 1,741,893 1,616,218 Notes payable to CommerceNet and Jay Tenenbaum in the original principal amount of $500,000, bearing interest at 6% per annum (the “Tegal Notes”). Principal and interest payments due annually from July 12, 2015 through July 12, 2017 341,612 341,612 7,083,505 6,957,830 Less current portion (7,083,505 ) (6,957,830 ) Notes payable - third parties, net of current portion $ - $ - |
Schedule of Notes Payable - Related Parties | Notes Payable – Related Parties December 31, 2018 December 31, 2017 Loan payable to Alcimede LLC, bearing interest at 6% per annum, with all principal and interest due August 2, 2018 $ - $ 168,500 Loan payable to Christopher Diamantis 800,000 960,000 Total notes payable, related parties 800,000 1,128,500 Less current portion of notes payable, related parties (800,000 ) (1,128,500 ) Total notes payable, related parties long-term $ - $ - |
Debentures (Tables)
Debentures (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debentures | The carrying amount of all outstanding debentures as of December 31, 2018 and 2017 was as follows: December 31, 2018 2017 Debentures $ 19,034,800 $ 17,720,082 Discount on debentures (6,247,469 ) (12,127,634 ) Deferred financing fees (11,015 ) (224,733 ) 12,776,316 5,367,715 Less current portion (12,776,316 ) (1,615,693 ) Debentures, long term $ - $ 3,752,022 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis | The following table sets forth the financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2018 and 2017: Level 1 Level 2 Level 3 Total As of December 31, 2017: Embedded conversion options $ - $ - $ 1,577,025 $ 1,577,025 Common stock warrants - - 10,858,225 10,858,225 Total $ - $ - $ 12,435,250 $ 12,435,250 As of December 31, 2018: Embedded conversion options - - 350,260 350,260 Total $ - $ - $ 350,260 $ 350,260 |
Schedule of Changes in Liabilities with Level 3 of Fair Value | The following table reconciles the changes in the liabilities categorized within Level 3 of the fair value hierarchy for the year ended December 31, 2018: Balance at December 31, 2017 $ 12,435,250 Gain on change in fair value of debentures and warrants* (15,167,335 ) Fair value of warrants exercised (4,619,150 ) Fair value of debentures converted (1,408,901 ) Fair value of debentures exchanged for Series I-2 Preferred Stock (1,420 ) Modification of warrants 8,603,069 Convertible debt 508,747 Balance at December 31, 2018 $ 350,260 *In addition to the gain on change in fair value of debentures and warrants of $15.2 million during the year ended December 31, 2018, the Company recorded a loss on the exchange of convertible debentures into shares of its Series I-2 Preferred Stock of approximately $1.5 million, as more fully discussed in Note 13. |
Capital Lease Obligations (Tabl
Capital Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Capital Lease Obligations | The Company leases various assets under capital leases that consisted of the following: December 31, 2018 December 31, 2017 Medical equipment $ 742,745 $ 4,686,736 Less accumulated depreciation (723,318 ) (3,842,443 ) Net $ 19,427 $ 844,293 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Summary of Preferred Stock Activity | The following table summarizes the activity in the Company’s various classes of Preferred Stock included in Stockholders’ Deficit for the years ended December 31, 2018 and 2017: Series G Series H Series F Series J Total Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Balance December 31, 2016 215 $ 2 10,019 $ 100 - $ - - $ - 10,234 $ 102 Conversion of Series H Preferred Stock into common stock - - (7,785 ) (78 ) - - - - (7,785 ) (78 ) Issuance of Series F Preferred Stock for business acquisition - - - - 1,750,000 17,500 - - 1,750,000 17,500 Exchange of Series H Preferred Stock for convertible debentures - - (2,174 ) (22 ) - - - - (2,174 ) (22 ) Balance December 31, 2017 215 $ 2 60 $ 0 1,750,000 $ 17,500 - $ - 1,750,275 $ 17,502 Series G Series H Series F Series J Total Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Balance December 31, 2017 215 $ 2 60 $ - 1,750,000 $ 17,500 - $ - 1,750,275 $ 17,502 Conversion of Series H Preferred Stock into common stock - - (50 ) - - - - (50 ) - Issuance of Series J Preferred Stock - - - 250,000 2,500 250,000 2,500 Balance December 31, 2018 215 $ 2 10 $ - 1,750,000 $ 17,500 250,000 $ 2,500 2,000,225 $ 20,002 |
Schedule of Stock Option Activity | The following table summarizes the stock option activity for the years ended December 31, 2018 and 2017: Number of options Weighted- average exercise price Weighted- average contractual term Outstanding at December 31, 2016 95 $ 970,725 8.93 Granted - Expired - Forfeit (18 ) Outstanding at December 31, 2017 77 $ 1,035,374 8.33 Granted - Expired - Forfeit - Outstanding at December 31, 2018 77 $ 1,036,374 7.33 Exercisable at December 31, 2018 68 $ 1,152,616 |
Schedule of Stock Option Outstanding and Exercisable | The following table summarizes information with respect to stock options outstanding and exercisable by employees and directors at December 31, 2018: Options outstanding Options vested and exercisable Exercise price Number outstanding Weighted average remaining contractual life (years) Weighted average exercise Aggregate intrinsic value Number vested Weighted average exercise Aggregate intrinsic value $ 2,250,500 22 7.25 $ – 22 $ 2,250,500 $ - $ 1,125,500 22 7.25 - 22 $ 1,125,500 - $ 225,000 16 7.33 - 12 $ 225,000 - $ 67,500 15 7.54 – 12 $ 67,500 – 77 $ 1,036,374 $ – 68 $ 1,152,616 $ – |
Schedule of Warrants Activity | The following summarizes the information related to warrant activity during the years ended December 31, 2018 and 2017: Number of warrants Weighted average exercise price Balance at December 31, 2016 188 $ 87,750.00 Increase in warrants during the period as a result of down round provisions 4,353,957 $ 18.8119 Warrants exchanged during the period (13 ) $ (93,525.00 ) March Warrants exercised during the period (1,326 ) $ 482.3643 Balance at December 31, 2017 4,352,806 $ 22.1782 Increase in warrants during the period as a result of down round provisions 53,234,923,889 March Warrants expired during the period (2,760,079 ) $ (0.1700 ) March Warrants exercised during the period (106,006,177 ) $ (0.0419 ) Balance at December 31, 2018 53,130,510,439 $ 0.0017 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax (Expense) Benefit | The provision for income taxes for the years ended December 31, 2018 and 2017 consists of the following: 2018 2017 Current Federal $ 766,070 $ 1,015,724 State - - 766,070 1,015,724 Deferred Federal - - State - - Provision for income taxes $ 766,070 $ 1,015,724 |
Schedule of Effective Income Tax Rate Reconciliation | The following reconciles the Federal statutory income tax rate to the Company’s effective tax rate for the years ended December 31, 2018 and 2017: 2018 2017 % % Federal statutory rate 21.00 34.00 Permanent and other items (5.81 ) (0.06 ) Beneficial conversion feature - (20.05 ) Federal income taxes audit and other adjustments 93.55 - Rate change - (10.40 ) Change in valuation allowance (102.77 ) (1.49 ) 5.97 2.00 |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities are comprised of the following at December 31, 2018 and 2017: 2018 2017 Deferred income tax assets: Amortization $ 914,520 $ 978,688 Net operating loss carryforward 19,567,649 5,244,000 Goodwill and intangible assets - (112,742 ) Allowance for doubtful accounts 703,873 259,110 Charitable contributions 593 618 Stock options 936,641 700,745 Accrued liabilities 390,041 121,993 Business interest expense 989,408 - Deferred state tax asset 1,139,059 595,531 24,641,784 7,787,943 Deferred income tax liabilities: Depreciation (2,301,605 ) (406,310 ) - (406,310 ) Deferred tax asset, net 22,340,179 7,381,633 Less: valuation allowance (22,340,179 ) (7,381,633 ) Net deferred tax assets $ - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments | At December 31, 2018, future minimum lease payments under these leases are as follows: Year ending December 31, 2019 $ 730,665 2020 31,543 Total minimum future lease payments $ 762,208 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Selected financial information for the Company’s operating segments is as follows: Year Ended December 31, 2018 2017 Net revenues - External Clinical Laboratory Operations $ 131,014 $ 2,210,318 Hospital Operations 14,417,676 877,898 $ 14,548,690 $ 3,088,216 Loss from operations Clinical Laboratory Operations $ (2,247,499 ) $ (4,672,768 ) Hospital Operations (6,434,538 ) (4,800,539 ) Corporate (4,542,583 ) (6,602,800 ) $ (13,224,620 ) $ (16,076,107 ) Depreciation and amortization Clinical Laboratory Operations $ 764,445 $ 1,639,954 Hospital Operations 498,352 73,985 Corporate 1,047 1,382 $ 1,263,844 $ 1,715,321 Capital expenditures Clinical Laboratory Operations $ - $ - Hospital Operations 213,105 1,422,002 $ 213,105 $ 1,422,002 Year Ended December 31, 2018 2017 Total assets Clinical Laboratory Operations $ 271,426 $ 1,503,520 Hospital Operations 13,568,933 2,549,504 Corporate 2,707,416 3,436,773 Assets of AMSG and HTS classified as held for sale 152,171 255,566 Eliminations (2,500,646 ) (1,454,570 ) $ 14,199,300 $ 6,290,794 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operation of Balance Sheet and Operation Statement | Carrying amounts of major classes of assets and liabilities classified as held for sale and included as part of discontinued operations in the consolidated balance sheets as of December 31, 2018 and 2017 consisted of the following: AMSG Assets and Liabilities: December 31, 2018 December 31, 2017 Cash $ 4,471 $ 9,273 Accounts receivable, net 6,838 19,022 Prepaid expenses and other current assets 25,477 25,477 Current assets classified as held for sale $ 36,786 $ 53,772 Property and equipment, net $ - $ - Deposits - - Non-current assets classified as held for sale $ - $ - Accounts payable (includes related parties) $ 532,858 $ 671,561 Accrued expenses 418,932 375,165 Current portion of notes payable 278,836 249,589 Current liabilities classified as held for sale $ 1,230,626 $ 1,296,315 Non-current liabilities classified as held for sale $ - $ - HTS Assets and Liabilities: December 31, 2018 December 31, 2017 Cash $ 2,523 $ 8,281 Accounts receivable, net 90,743 160,715 Prepaid expenses and other current assets 10,300 3,964 Current assets classified as held for sale $ 103,566 $ 172,960 Property and equipment, net $ 5,790 $ 21,078 Deposits 6,029 7,756 Non-current assets classified as held for sale $ 11,819 $ 28,834 Accounts payable (includes related parties) $ 546,969 $ 407,404 Accrued expenses 520,251 269,135 Current liabilities classified as held for sale $ 1,067,220 $ 676,539 Consolidated Discontinued Operations Assets and Liabilities: December 31, 2018 December 31, 2017 Cash $ 6,994 $ 17,554 Accounts receivable, net 97,581 179,737 Prepaid expenses and other current assets 35,777 29,441 Current assets classified as held for sale $ 140,352 $ 226,732 Property and equipment, net $ 5,790 $ 21,078 Deposits 6,029 7,756 Non-current assets classified as held for sale $ 11,819 $ 28,834 Accounts payable (includes related parties) $ 1,079,827 $ 1,078,965 Accrued expenses 939,183 644,300 Current portion of notes payable 278,836 249,589 Current liabilities classified as held for sale $ 2,297,846 $ 1,972,854 Major line items constituting loss from discontinued operations in the consolidated statements of operations for the years ended December 31, 2018 and 2017 consisted of the following: AMSG Income (Loss) from Discontinued Operations: Year Ended December 31, 2018 2017 Revenue from services $ 102,991 $ 283,460 Cost of services 38,299 12,575 Gross profit 64,692 270,885 Operating expenses 480,436 2,525,110 Gain on sale of stock (800,000 ) - Other expense 1,049 46,859 Provision for income taxes - - Income (loss) from Discontinued Operations: $ 383,207 $ (2,301,084 ) HTS Loss from Discontinued Operations: Year Ended December 31, 2018 2017 Revenue from services (**) $ 1,419,494 $ 1,650,109 Cost of services 123,721 168,274 Gross profit 1,295,773 1,481,835 Operating expenses 2,108,880 3,402,860 Other expense 4,943 54,809 Provision for income taxes - - Loss from Discontinued Operations: $ (818,050 ) $ (1,975,834 ) **Revenue from services, includes related party revenue of $0.7 million and $0.7 million, respectively Consolidated Loss from Discontinued Operations: Year Ended December 31, 2018 2017 Revenue from services $ 1,522,485 $ 1,933,569 Cost of services 162,020 180,849 Gross profit 1,360,465 1,752,720 Operating expenses 2,589,316 5,927,970 Gain on sale of stock (800,000 ) - Other expense 5,992 101,668 Provision for income taxes - - Loss from Discontinued Operations: $ (434,843 ) $ (4,276,918 ) |
Schedule of Fair Value of Acquired Assets and Liabilities Assumed | The following table summarizes the fair values of assets acquired and liabilities assumed at the acquisition date of Genomas. See the discussion below regarding the impairment of the goodwill acquired. Cash $ 7,990 Accounts receivable, net 6,503 Accounts payable and accrued expenses (458,736 ) Deferred revenue (20,000 ) Loans payable short-term (142,514 ) Note payable long-term (134,118 ) Total identifiable net liabilities (740,875 ) Goodwill 914,972 Total consideration $ 174,097 |
Supplemental Disclosure of Ca_2
Supplemental Disclosure of Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Information | Year Ended December 31, 2018 2017 Cash paid for interest $ 313,918 $ 1,200,759 Cash paid for income taxes $ 23,362 $ 541,313 Acquisition of Jamestown Regional Medical Center: Inventory $ 450,682 $ - Prepaid and other assets 310,385 - Property and equipment 7,129,484 - Intangible assets 504,806 - Accrued expenses (193,966 ) - Non-cash investing and financing activities: Cashless exercise of warrants 4,619,150 - Exchange of debentures for Series I-2 Preferred Stock 3,127,556 - Note payable and accrued expenses settled through issuance of Series J Preferred Stock 250,000 - Common stock issued for conversion of Series I-2 Preferred Stock 1,513,105 - Beneficial conversion feature 192,308 Services and severance settled through the issuances of common stock - 161,003 Exchange of convertible debentures for convertible debentures and warrants - 10,734,336 Series F Preferred Stock issued for business acquisition - 174,097 Notes payable and warrants settled through issuance of common stock - 440,000 Convertible debentures issued in exchange for Series H Preferred Stock - 2,695,760 Debentures converted into common stock 8,128,044 7,306,314 Deemed dividend for trigger of down round provision feature 231,843,826 53,341,619 Conversions of preferred stock into common stock - 7,785,000 Value of convertible liabilities - 12,435,250 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Schedule of Dilutive Effect of Potential Common Shares | The following table presents the dilutive effect of our various potential common shares as of September 10, 2019: September 10, 2019 Common shares outstanding 7,508,936,775 Dilutive potential shares: Stock options 77 Warrants 634,525,355,377 Convertible debt 30,570,395,193 Convertible preferred stock 83,791,788,355 Total dilutive potential common shares, including outstanding common stock 756,396,475,777 |
Description of Business and B_2
Description of Business and Basis of Presentation (Details Narrative) - USD ($) | Nov. 05, 2018 | Sep. 21, 2017 | Feb. 07, 2017 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 18, 2018 | Apr. 18, 2017 | Dec. 31, 2016 |
Stockholder's equity | $ (39,167,864) | $ (40,613,461) | $ 2,500,000 | $ (14,885,896) | |||||
Reserve stock split, description | 1-for-500 reverse stock split | 1-for-15 reverse stock split | 1-for-30 reverse stock split | ||||||
Common stock conversion description | As a result of the Reverse Stock Splits, every 30 shares of the Company's then outstanding common stock was combined and automatically converted into one share of the Company's common stock on February 22, 2017, every 15 shares of the Company's then outstanding common stock was combined and automatically converted into one share of the Company's common stock on October 5, 2017 and every 500 shares of the Company's common stock was combined and automatically converted into one share of the Company's common stock on November 12, 2018. | ||||||||
Common stock shares authorized | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | ||||||
Common stock par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | |||||||
Preferred stock par value | $ 0.01 | $ 0.01 | |||||||
Working capital deficit | $ 39,300,000 | ||||||||
Accumulated defecit | (415,046,606) | $ (169,180,425) | |||||||
Loss from continuing operations | (13,587,512) | (50,921,024) | |||||||
Cash used in operating activities | (7,678,730) | (17,713,547) | |||||||
Change in fair value of derivative instruments | 13,696,214 | (42,702,815) | |||||||
Value of convertible liabilities | $ (12,435,250) | ||||||||
Jamestown Regional Medical Center [Member] | |||||||||
Cash acquired from acquisition | $ 7,600,000 | ||||||||
Maximum [Member] | |||||||||
Common stock par value | 0.01 | ||||||||
Minimum [Member] | |||||||||
Common stock par value | $ 0.0001 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)Segment | Dec. 31, 2017USD ($) | |
Estimated contractual allowances | $ 63,000 | $ 7,000 | |||
Total uncompensated care as a percentage of gross revenues | 0.11 | 0.18 | |||
Bad debts | $ 9,400,000 | $ 1,500,000 | |||
Allowance for adjustment of revenue | 73,500,000 | 20,900,000 | |||
Impairment charge | 173,799 | ||||
Derivative liability | $ 56,000,000 | ||||
Reversal of interest expense | 41,000,000 | ||||
Discount on convertible debenture | $ 6,247,469 | $ 12,127,634 | 6,247,469 | $ 12,127,634 | |
Deemed dividend, down round feature | 53,300,000 | $ 231,800,000 | |||
Deemed dividend | $ 51,000,000 | ||||
Number of operating segment | Segment | 2 | ||||
Additional Paid in Capital [Member] | |||||
Discount on convertible debenture | 15,000,000 | $ 15,000,000 | |||
Jamestown Regional Medical Center [Member] | |||||
Impairment charge | $ 200,000 | ||||
Genomas, Inc [Member] | |||||
Goodwill impairment charge | $ 1,000,000 |
Loss Per Share (Details Narrati
Loss Per Share (Details Narrative) | Sep. 10, 2019shares |
Subsequent Event [Member] | |
Total dilutive potential common shares, including outstanding common stock | 756,400,000,000 |
Loss Per Share - Schedule of Ea
Loss Per Share - Schedule of Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Numerator: Net loss from continuing operations | $ (13,587,512) | $ (50,921,024) |
Numerator: Deemed dividend from trigger of down round provision feature | (231,843,826) | (53,341,619) |
Numerator: Net loss attributable to common stockholders, continuing operations | (245,431,338) | (104,262,643) |
Numerator: Net loss from discontinued operations | (434,843) | (4,276,918) |
Numerator: Net loss available to common stockholders | $ (245,866,181) | $ (108,539,561) |
Denominator: Basic and diluted weighted average common shares outstanding | 10,022,180 | 4,616 |
Loss per share, Basic and diluted, continuing operations | $ (24.49) | $ (22,587.23) |
Loss per share, Basic and diluted, discontinued operations | (0.04) | (926.54) |
Total basic and diluted | $ (24.53) | $ (23,513.77) |
Loss Per Share - Schedule of An
Loss Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Dilutive potential shares | 63,174,170,106 | 5,366,285 |
Warrants [Member] | ||
Dilutive potential shares | 53,130,510,439 | 4,352,806 |
Convertible Preferred Stock [Member] | ||
Dilutive potential shares | 7,863,880,588 | 359,563 |
Convertible Debentures [Member] | ||
Dilutive potential shares | 2,179,779,002 | 653,839 |
Stock Option [Member] | ||
Dilutive potential shares | 77 | 77 |
Accounts Receivable (Details Na
Accounts Receivable (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | ||
Bad debt expenses | $ 9,400,000 | $ 1,500,000 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts receivable, gross | $ 32,229,653 | $ 10,072,198 |
Less: Allowance for bad debts | (2,777,521) | (987,403) |
Accounts receivable, net | 3,811,749 | 971,312 |
Clinical Laboratory Operations [Member] | ||
Accounts receivable, gross | 622,009 | 1,478,451 |
Less: Allowance for discounts | (573,584) | (1,177,054) |
Hospitals Operations [Member] | ||
Accounts receivable, gross | 31,607,644 | 8,593,747 |
Less: Allowance for discounts | $ (25,066,799) | $ (6,936,429) |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | Jan. 13, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 02, 2018 |
Property plant and equipments | $ 7,129,484 | |||
Depreciation expenses | 1,200,000 | 1,700,000 | ||
Impairment charge | $ 173,799 | |||
Purchase Agreement [Member] | ||||
Business acquisition purchase price | $ 8,200,000 | |||
Property plant and equipments | $ 7,100,000 | |||
Oneida Asset [Member] | ||||
Payments to acquire assets | $ 1,000,000 | |||
Building [Member] | ||||
Depreciated term | 39 years | |||
Leasehold Improvements [Member] | ||||
Depreciated term, useful life description | Property and equipment are depreciated on a straight-line basis over their respective lives. The building is being depreciated over 39 years, leasehold improvements were depreciated over the life of the lease(s) and the remaining equipment is being depreciated over lives ranging from three to seven years. | |||
Other Machinery and Equipment [Member] | Minimum [Member] | ||||
Depreciated term | 3 years | |||
Other Machinery and Equipment [Member] | Maximum [Member] | ||||
Depreciated term | 7 years |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Property and equipment, gross | $ 12,711,890 | $ 9,798,914 |
Less accumulated depreciation | (4,184,986) | (7,103,474) |
Property and equipment, net | 8,526,904 | 2,695,440 |
Medical Equipment [Member] | ||
Property and equipment, gross | 1,946,000 | 696,195 |
Land [Member] | ||
Property and equipment, gross | 550,700 | |
Building [Member] | ||
Property and equipment, gross | 6,482,260 | 1,359,472 |
Equipment [Member] | ||
Property and equipment, gross | 437,029 | 476,548 |
Equipment under Capital Leases [Member] | ||
Property and equipment, gross | 742,745 | 4,686,736 |
Furniture [Member] | ||
Property and equipment, gross | 244,828 | 222,824 |
Leasehold Improvements [Member] | ||
Property and equipment, gross | 1,303,131 | 1,303,131 |
Vehicles [Member] | ||
Property and equipment, gross | 56,624 | 196,534 |
Computer Equipment [Member] | ||
Property and equipment, gross | 224,447 | 226,441 |
Software [Member] | ||
Property and equipment, gross | $ 724,126 | $ 631,033 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | Jun. 02, 2018 | Jun. 02, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Fair value of tangible assets acquired | $ 7,566,670 | |||
Jamestown Regional Medical Center [Member] | ||||
Purchase price paid | $ 635,096 | $ 635,096 | ||
Fair value of assets acquired and liabilities assumed | 8,201,766 | 8,201,766 | ||
Fair value of tangible assets acquired | 7,566,670 | 7,566,670 | ||
Total cost of acquisition | $ 1,100,000 | 1,100,000 | ||
Closing costs of acquisition | 35,735 | |||
Legal costs | $ 115,000 |
Acquisitions - Schedule of Asse
Acquisitions - Schedule of Assets Acquired and Liabilites Assumed (Details) - USD ($) | Jun. 02, 2018 | Jun. 02, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Inventories | $ 450,682 | |||
Prepaids and deposits | 310,385 | |||
Property and equipment | 7,129,484 | |||
Intangible Assets | 504,806 | |||
Accrued expenses | (193,966) | |||
Gain on bargain purchase | $ 7,566,670 | |||
Jamestown Regional Medical Center [Member] | ||||
Total purchase price | $ 635,096 | $ 635,096 | ||
Cash | 375 | 375 | ||
Inventories | 450,682 | 450,682 | ||
Prepaids and deposits | 310,385 | 310,385 | ||
Property and equipment | 7,129,484 | 7,129,484 | ||
Intangible Assets | 504,806 | 504,806 | ||
Accrued expenses | (193,966) | (193,966) | ||
Net tangible and intangible assets acquired | 8,201,766 | 8,201,766 | ||
Gain on bargain purchase | $ 7,566,670 | $ 7,566,670 |
Acquisitions - Schedule of Inta
Acquisitions - Schedule of Intangible Assets Acquisition (Details) - Jamestown Regional Medical Center [Member] | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Certificate of Need [Member] | |
Intangible assets acquired | $ 259,443 |
Intangible assets, life description | Infinite |
Intangible assets, impairment | |
Intangible assets, amortization | |
Intangible assets, carrying Value | 259,443 |
Non-compete [Member] | |
Intangible assets acquired | $ 245,363 |
Intangible assets, life | 2 years |
Intangible assets, impairment | $ (173,799) |
Intangible assets, amortization | (71,564) |
Intangible assets, carrying Value | |
Total Intangibles [Member] | |
Intangible assets acquired | 504,806 |
Intangible assets, impairment | (173,799) |
Intangible assets, amortization | (71,564) |
Intangible assets, carrying Value | $ 259,443 |
Acquisitions - Schedule of Impa
Acquisitions - Schedule of Impaired Asset of Operations Results (Details) - USD ($) | 7 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net Revenue | $ 14,548,690 | $ 3,088,216 | |
Net Loss | $ (14,022,355) | $ (55,197,942) | |
Jamestown Regional Medical Center [Member] | |||
Net Revenue | $ 7,898,222 | ||
Net Loss | $ (2,022,380) |
Acquisitions - Schedule of Unau
Acquisitions - Schedule of Unaudited Pro-forma of Results of Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Deemed dividend from trigger of down round provision feature | $ (231,843,826) | $ (53,341,619) |
Jamestown Regional Medical Center [Member] | ||
Net revenue | 19,983,266 | 19,446,732 |
Net loss from continuing operations | (15,720,672) | (55,305,325) |
Net loss | (16,155,515) | (59,582,243) |
Deemed dividend from trigger of down round provision feature | (231,843,826) | (53,341,619) |
Net loss to common stockholders | $ (247,999,341) | $ (112,923,862) |
Basic and diluted continuing operations | $ (24.70) | $ (23,537.03) |
Basic and diluted net loss to common stockholders | $ (24.75) | $ (24,463.57) |
Accrued Expenses (Details Narra
Accrued Expenses (Details Narrative) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued expenses | $ 10,711,281 | $ 4,967,405 |
Settlement Agreement [Member] | ||
Accrued expenses | $ 4,900,000 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Commissions payable | $ 19,113 | $ 24,470 |
Sales tax payable | 8,016 | |
Accrued payroll and related liabilities | 3,400,052 | 897,088 |
Accrued property tax | 47,396 | |
Accrued interest | 5,464,837 | 2,636,057 |
Other accrued expenses | 1,771,867 | 1,409,790 |
Accrued expenses | $ 10,711,281 | $ 4,967,405 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | May 31, 2019 | Apr. 05, 2019 | Aug. 02, 2017 | Mar. 24, 2017 | Mar. 21, 2017 | Mar. 07, 2017 | Feb. 02, 2017 | Mar. 31, 2016 | Feb. 03, 2015 | Mar. 31, 2017 | Feb. 28, 2017 | Jan. 31, 2017 | Aug. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 07, 2016 | Nov. 03, 2016 | Jun. 29, 2015 |
Consideration received | $ 5,000,000 | |||||||||||||||||
Estimated value of receivable | $ 8,700,000 | |||||||||||||||||
Adjustment down value | $ 0 | |||||||||||||||||
Investment return percentage | 20.00% | |||||||||||||||||
Repayment of debt | $ 500,000 | |||||||||||||||||
Consideration received description | The consideration received, the counterparty received the right to: (i) a 20% per annum investment return from the Company on the consideration, with a minimum repayment term of six months and minimum return of $0.5 million, (ii) all payments recovered from the accounts receivable up to $5.25 million, if paid in full within six months, or $5.5 million, if not paid in full within six months, and (iii) 20% of all payments of the accounts receivable in excess of amounts received in (i) and (ii). On March 31, 2017, to the extent that the counterparty had not been paid $6.0 million, the Company was required to pay the difference. Christopher Diamantes, a director of the Company, guaranteed the Company's obligation. On March 24, 2017, the Company, the counterparty and Mr. Diamantis, as guarantor, entered into an amendment (the "Amendment") to extend the Company's obligation to March 31, 2018. Also, what the counterparty was to receive was amended to equal (a) the $5,000,000 purchase price plus a 20% per annum investment return thereon, plus (b) $500,000, plus (c) the product of (i) the proceeds received from the accounts receivable, minus the amount set forth in clauses (a) and (b), multiplied by (ii) 40%. In connection with the extension, the counterparty received a fee of $1,000,000. | |||||||||||||||||
Loan payable | $ 800,000 | |||||||||||||||||
Payments for related party | 3,972,348 | 5,298,782 | ||||||||||||||||
Accrued interest | 200,000 | $ 43,000 | $ 43,000 | |||||||||||||||
Debt instrument face amount | $ 341,612 | |||||||||||||||||
Loan outstanding | 7,083,505 | $ 6,957,830 | ||||||||||||||||
Alcimede LLC [Member] | ||||||||||||||||||
Loan payable | $ 3,000,000 | |||||||||||||||||
Debt instrument interest rate | 6.00% | |||||||||||||||||
Debt instrument maturity date | Feb. 2, 2016 | |||||||||||||||||
Debt instrument extended due date | Aug. 2, 2018 | Aug. 2, 2017 | ||||||||||||||||
Loan outstanding | $ 2,500,000 | |||||||||||||||||
Repayment of common stock | $ 300,000 | |||||||||||||||||
Mr Lagan [Member] | ||||||||||||||||||
Repayment of debt | $ 50,000 | |||||||||||||||||
Christopher Diamantis [Member] | ||||||||||||||||||
Repayment of debt | 4,000,000 | |||||||||||||||||
Loan payable | $ 3,300,000 | |||||||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||||||
Incurred interest | $ 300,000 | |||||||||||||||||
Maximum [Member] | ||||||||||||||||||
Debt instrument face amount | 1,700,000 | |||||||||||||||||
Minimum [Member] | ||||||||||||||||||
Debt instrument face amount | 1,400,000 | |||||||||||||||||
TCA Debenture [Member] | ||||||||||||||||||
Repayment of debt | $ 750,000 | |||||||||||||||||
Amount of fee received | $ 150,000 | |||||||||||||||||
Debt instrument maturity date | Jun. 27, 2017 | |||||||||||||||||
Accrued and unpaid interest | $ 100,000 | $ 400,000 | ||||||||||||||||
2017 Diamantis Note [Member] | ||||||||||||||||||
Payments for related party | 3,800,000 | |||||||||||||||||
Accrued and unpaid interest | $ 500,000 | |||||||||||||||||
April 2017 Through September 2017 [Member] | TCA Debenture [Member] | ||||||||||||||||||
Debt instrument periodic payment | $ 2,600,000 | |||||||||||||||||
Christopher Diamantis [Member] | ||||||||||||||||||
Additional payment for related party | 5,000,000 | |||||||||||||||||
Debt instrument interest rate | 10.00% | 10.00% | ||||||||||||||||
Payments for related party | 9,937,105 | |||||||||||||||||
Accrued interest | 4,937,105 | |||||||||||||||||
Accrued and unpaid interest | $ 500,000 | $ 500,000 | ||||||||||||||||
Advances from director | $ 3,600,000 | $ 3,600,000 | ||||||||||||||||
Christopher Diamantis [Member] | Subsequent Event [Member] | ||||||||||||||||||
Payments for related party | $ 5,000,000 | $ 5,000,000 | ||||||||||||||||
Counterparty [Member] | ||||||||||||||||||
Investment return percentage | 40.00% | |||||||||||||||||
Purchase price | $ 500,000 | |||||||||||||||||
Amount of fee received | $ 100,000 | |||||||||||||||||
Counterparty [Member] | Christopher Diamantis [Member] | ||||||||||||||||||
Investment return percentage | 20.00% | |||||||||||||||||
Purchase price | $ 5,000,000 | |||||||||||||||||
Amount of fee received | $ 1,000,000 | |||||||||||||||||
Loan payable | 2,000,000 | |||||||||||||||||
Additional payment for related party | $ 7,694,685 | |||||||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||||||
Debt instrument maturity date | Apr. 5, 2019 | |||||||||||||||||
Counterparty [Member] | Christopher Diamantis [Member] | Final Payment[Member] | ||||||||||||||||||
Payments for related party | $ 4,937,105 | |||||||||||||||||
Debt instrument maturity date | Jul. 28, 2019 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Note payable | $ 7,083,505 | $ 6,957,830 |
Less current portion | (7,083,505) | (6,957,830) |
Notes payable - third parties, net of current portion | ||
Notes Payable Third Parties One [Member] | ||
Note payable | 5,000,000 | 5,000,000 |
Notes Payable Third Parties Two [Member] | ||
Note payable | 1,741,893 | 1,616,218 |
Notes Payable Third Parties Three [Member] | ||
Note payable | $ 341,612 | $ 341,612 |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
original principal amount | $ 800,000 | |
Notes Payable Third Parties Two [Member] | ||
original principal amount | $ 3,000,000 | $ 3,000,000 |
Debt instruments interest rate | 16.00% | 16.00% |
Debt maturity description | Principal and interest payments due in various installments through December 31, 2017. | Principal and interest payments due in various installments through December 31, 2017. |
Notes Payable Third Parties Three [Member] | ||
original principal amount | $ 500,000 | $ 500,000 |
Debt instruments interest rate | 6.00% | 6.00% |
Debt maturity description | July 12, 2015 through July 12, 2017 | July 12, 2015 through July 12, 2017 |
Notes Payable - Schedule of N_3
Notes Payable - Schedule of Notes Payable - Related Parties (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Less current portion of notes payable, related parties | $ (800,000) | $ (1,128,500) |
Notes Payable Related Parties One [Member] | ||
Total notes payable, related parties | 168,500 | |
Notes Payable Related Parties Two [Member] | ||
Total notes payable, related parties | 800,000 | 960,000 |
Notes Payable Related Parties [Member] | ||
Total notes payable, related parties | 800,000 | 1,128,500 |
Less current portion of notes payable, related parties | (800,000) | (1,128,500) |
Total notes payable, related parties, long-term |
Notes Payable - Schedule of N_4
Notes Payable - Schedule of Notes Payable - Related Parties (Details) (Parenthetical) - Notes Payable Related Parties One [Member] | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt instruments interest rate | 6.00% | 6.00% |
Debt instruments maturity date | Aug. 2, 2018 | Aug. 2, 2018 |
Debentures (Details Narrative)
Debentures (Details Narrative) - USD ($) | Mar. 27, 2019 | Nov. 08, 2018 | Sep. 06, 2018 | Aug. 02, 2018 | Jul. 16, 2018 | Feb. 08, 2018 | Sep. 19, 2017 | Jul. 17, 2017 | Mar. 21, 2017 | Feb. 02, 2017 | Mar. 31, 2016 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Jun. 28, 2018 | May 21, 2018 | May 14, 2018 | Mar. 05, 2018 | Oct. 31, 2017 | Jun. 22, 2017 | Jun. 02, 2017 | Nov. 03, 2016 |
Outstanding debentures | $ 12,776,316 | $ 5,367,715 | $ 12,776,316 | ||||||||||||||||||||
Debt due description | Due in 2019 | ||||||||||||||||||||||
Debt instrument face amount | $ 341,612 | ||||||||||||||||||||||
Proceeds from debt | $ 9,000,000 | 15,742,500 | |||||||||||||||||||||
Repayment of debt | $ 500,000 | ||||||||||||||||||||||
Interest expenses | 8,649,232 | ||||||||||||||||||||||
Amortization of debt discount | $ 17,558,008 | 10,412,324 | |||||||||||||||||||||
Stock converted into debt, value | 20,000,000 | ||||||||||||||||||||||
Unamortized Discount | $ 7,284,194 | 7,284,194 | |||||||||||||||||||||
Issuance Agreements [Member] | |||||||||||||||||||||||
Debt instrument face amount | $ 4,300,000 | $ 4,300,000 | $ 4,300,000 | $ 4,300,000 | |||||||||||||||||||
Debt instrument maturity date | Sep. 19, 2019 | Sep. 19, 2019 | Sep. 19, 2019 | Sep. 19, 2019 | |||||||||||||||||||
Proceeds from offerings | $ 3,500,000 | $ 3,500,000 | $ 3,500,000 | $ 3,500,000 | |||||||||||||||||||
TCA Debenture [Member] | |||||||||||||||||||||||
Debt instrument maturity date | Jun. 27, 2017 | ||||||||||||||||||||||
Repayment of debt | $ 750,000 | ||||||||||||||||||||||
March Debentures [Member] | |||||||||||||||||||||||
Debt instrument face amount | $ 1,984,000 | ||||||||||||||||||||||
Debt instrument maturity date | Mar. 21, 2019 | ||||||||||||||||||||||
September Debenture [Member] | |||||||||||||||||||||||
Principal amount of debt converted into shares | 1,741,580 | ||||||||||||||||||||||
Debentures and Warrants [Member] | |||||||||||||||||||||||
Proceeds from debt | 24,700,000 | 24,700,000 | |||||||||||||||||||||
Non-cash interest and amortization of debt discount expense | 17,600,000 | $ 19,000,000 | |||||||||||||||||||||
Unamortized Discount | 6,200,000 | 6,200,000 | |||||||||||||||||||||
February 2017 Offering [Member] | |||||||||||||||||||||||
Debt instrument face amount | $ 1,600,000 | ||||||||||||||||||||||
Warrants to purchase common stock | 13 | ||||||||||||||||||||||
Exercise price of warrants | $ 19,350 | ||||||||||||||||||||||
Warrant purchase price | $ 1,500,000 | ||||||||||||||||||||||
Principal amount of debt converted into shares | $ 2,500,000 | ||||||||||||||||||||||
March 2017 Offerings [Member] | |||||||||||||||||||||||
Debt instrument face amount | $ 10,850,000 | ||||||||||||||||||||||
Debt instrument maturity date | Mar. 21, 2019 | ||||||||||||||||||||||
Proceeds from debt | $ 8,400,000 | ||||||||||||||||||||||
Convertible debt | 2,500,000 | ||||||||||||||||||||||
Interest expenses | 400,000 | ||||||||||||||||||||||
Stock converted into debt | $ 2,700,000 | ||||||||||||||||||||||
Debt original issue discount, percentage | 24.00% | ||||||||||||||||||||||
March 2017 Offerings [Member] | Series H Convertible Preferred Stock [Member] | |||||||||||||||||||||||
Stock of convertible preferred stock | $ 2,200,000 | ||||||||||||||||||||||
March 2017 Offerings [Member] | March Warrants [Member] | |||||||||||||||||||||||
Debt instrument original amount | 41,300,000 | ||||||||||||||||||||||
March 2017 Offerings [Member] | TCA Debenture [Member] | |||||||||||||||||||||||
Repayment of debt | 750,000 | ||||||||||||||||||||||
March 2017 Offerings [Member] | March Debentures [Member] | |||||||||||||||||||||||
Outstanding debentures | $ 2,000,000 | 2,000,000 | |||||||||||||||||||||
Debt instrument face amount | $ 16,000,000 | ||||||||||||||||||||||
Stock converted into debt | $ 14,000,000 | ||||||||||||||||||||||
Debt original issue discount, percentage | 100.00% | 100.00% | |||||||||||||||||||||
Warrants exercisable | 47,300,000,000 | 47,300,000,000 | |||||||||||||||||||||
Debenture description | The March Debentures are convertible into shares of the Company's common stock, at a conversion price which has been adjusted pursuant to the terms of the March Debentures to $.00102 per share as of December 31, 2018, due to prices at which the Company has subsequently issued shares of common stock. The Convertible Debentures began to amortize monthly commencing on the 90th day following the closing date. The Exchange Debentures began to amortize monthly on the closing date. On each monthly amortization date, the Company may elect to repay 5% of the original principal amount of the March Debentures in cash or, in lieu thereof, the conversion price of such debentures will thereafter be 85% of the volume weighted average price at the time of conversion. | ||||||||||||||||||||||
Stock converted into debt, value | 4,258,172 | ||||||||||||||||||||||
Debt instrument original amount | $ 15,300,000 | ||||||||||||||||||||||
Non-cash interest and amortization of debt discount expense | $ 43,700,000 | ||||||||||||||||||||||
March 2017 Offerings [Member] | March Debentures [Member] | Series A Warrant [Member] | |||||||||||||||||||||||
Exercise price of warrants | $ .00102 | $ .00102 | |||||||||||||||||||||
Warrants exercisable | 17,900,000,000 | 17,900,000,000 | |||||||||||||||||||||
Warrant term | 5 years | 5 years | |||||||||||||||||||||
March 2017 Offerings [Member] | March Debentures [Member] | Series B Warrant [Member] | |||||||||||||||||||||||
Exercise price of warrants | $ .00102 | $ .00102 | |||||||||||||||||||||
Interest expenses | $ 6,400,000 | ||||||||||||||||||||||
Warrants exercisable | 11,300,000,000 | 11,300,000,000 | |||||||||||||||||||||
Warrant term | 18 months | 18 months | |||||||||||||||||||||
Amortization of debt discount | $ 8,600,000 | ||||||||||||||||||||||
Debenture description | The Company extended the exercise period twice, once to March 21, 2019 and the second time to June 21, 2019 | ||||||||||||||||||||||
March 2017 Offerings [Member] | March Debentures [Member] | Series B Warrant [Member] | Subsequent Event [Member] | |||||||||||||||||||||||
Warrant description | The expiration date of the Series B Warrants was extended 90 days to September 21, 2019 and again on May 10, 2019 to March, 31, 2022. | ||||||||||||||||||||||
March 2017 Offerings [Member] | March Debentures [Member] | Series C Warrant [Member] | |||||||||||||||||||||||
Exercise price of warrants | $ .00102 | $ .00102 | |||||||||||||||||||||
Warrants exercisable | 18,200,000,000 | 18,200,000,000 | |||||||||||||||||||||
Warrant term | 5 years | 5 years | |||||||||||||||||||||
March 2017 Offerings [Member] | Mr Diamantis [Member] | |||||||||||||||||||||||
Repayment of debt | $ 3,800,000 | ||||||||||||||||||||||
June 2017 Offerings [Member] | June Warrants [Member] | |||||||||||||||||||||||
Warrants to purchase common stock | 133 | 67 | |||||||||||||||||||||
Exercise price of warrants | $ 2,850 | $ 2,925 | |||||||||||||||||||||
June 2017 Offerings [Member] | June Debentures [Member] | |||||||||||||||||||||||
Warrants to purchase common stock | 200 | ||||||||||||||||||||||
Amortization of debt discount | $ 107,700 | ||||||||||||||||||||||
June 2017 Offerings [Member] | Accredited Investor [Member] | June Warrants [Member] | |||||||||||||||||||||||
Warrant purchase price | $ 1,902,700 | ||||||||||||||||||||||
Proceeds from issuance warrants | $ 1,500,000 | ||||||||||||||||||||||
July 2017 Offerings [Member] | |||||||||||||||||||||||
Debt instrument face amount | $ 4,136,862 | ||||||||||||||||||||||
Warrants to purchase common stock | 283 | ||||||||||||||||||||||
Exercise price of warrants | $ 2,812.50 | $ 2,812.50 | |||||||||||||||||||||
Principal amount of debt converted into shares | $ 1,902,700 | ||||||||||||||||||||||
Debt instrument maturity date | Oct. 17, 2017 | ||||||||||||||||||||||
Warrant consideration in cash | $ 2,000,000 | ||||||||||||||||||||||
July 2017 Offerings [Member] | July Debentures [Member] | |||||||||||||||||||||||
Principal amount of debt converted into shares | $ 6,400,000 | ||||||||||||||||||||||
September 2017 Offerings [Member] | |||||||||||||||||||||||
Debt instrument face amount | 2,604,000 | ||||||||||||||||||||||
Principal amount of debt converted into shares | $ 4,136,862 | ||||||||||||||||||||||
Debt instrument maturity date | Sep. 19, 2019 | ||||||||||||||||||||||
Interest expenses | $ 1,000,000 | ||||||||||||||||||||||
Debt original issue discount, percentage | 24.00% | 24.00% | |||||||||||||||||||||
Amortization of debt discount | $ 100,000 | ||||||||||||||||||||||
Debenture description | On each monthly amortization date, the Company may elect to repay 5% of the original principal amount of September Debentures in cash or, in lieu thereof, the conversion price of such September Debentures shall thereafter be 85% of the volume weighted average price at the time of conversion, but not less than the floor of $390.00 per share. | ||||||||||||||||||||||
Proceeds from offerings | $ 2,100,000 | ||||||||||||||||||||||
Conversion price per share | $ 390 | $ 390 | |||||||||||||||||||||
September 2017 Offerings [Member] | September Warrants [Member] | |||||||||||||||||||||||
Exercise price of warrants | $ 390 | $ 390 | |||||||||||||||||||||
September 2017 Offerings [Member] | Series A Warrant [Member] | |||||||||||||||||||||||
Warrants to purchase common stock | 69,355 | ||||||||||||||||||||||
Warrants exercisable | 23,118 | 23,118 | |||||||||||||||||||||
Warrant term | 5 years | 5 years | |||||||||||||||||||||
September 2017 Offerings [Member] | Series B Warrant [Member] | |||||||||||||||||||||||
Warrants to purchase common stock | 69,355 | ||||||||||||||||||||||
Warrants exercisable | 23,119 | 23,119 | |||||||||||||||||||||
Warrant term | 18 months | 18 months | |||||||||||||||||||||
September 2017 Offerings [Member] | Series B Warrant [Member] | Subsequent Event [Member] | |||||||||||||||||||||||
Warrant description | The expiration date of these Series B Warrants was extended 90 days to September 21, 2019 and again on May 10, 2019 the expiration date was extended to March, 31, 2022. | ||||||||||||||||||||||
September 2017 Offerings [Member] | Series C Warrant [Member] | |||||||||||||||||||||||
Warrants to purchase common stock | 69,355 | ||||||||||||||||||||||
Warrants exercisable | 23,118 | 23,118 | |||||||||||||||||||||
Warrant term | 5 years | 5 years | |||||||||||||||||||||
September 2017 Offerings [Member] | September Debenture [Member] | |||||||||||||||||||||||
Principal amount of debt converted into shares | $ 6,412,136 | ||||||||||||||||||||||
Stock converted into debt | $ 1,741,580 | $ 1,384,556 | |||||||||||||||||||||
Stock converted into debt, value | 2,176.9 | 1,730.1 | |||||||||||||||||||||
Loss on exchange of stock | $ 819,561 | $ 651,562 | |||||||||||||||||||||
2018 Offerings [Member] | |||||||||||||||||||||||
Debt instrument face amount | $ 6,810,000 | $ 6,810,000 | $ 6,810,000 | $ 6,810,000 | |||||||||||||||||||
Debt instrument maturity date | Sep. 19, 2019 | ||||||||||||||||||||||
Amortization of debt discount | $ 1,310,000 | ||||||||||||||||||||||
Proceeds from offerings | $ 5,500,000 | ||||||||||||||||||||||
Conversion price per share | $ .052 | $ .052 |
Debentures - Schedule of Debent
Debentures - Schedule of Debentures (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Debentures | $ 19,034,800 | $ 17,720,082 |
Discount on debentures | (6,247,469) | (12,127,634) |
Deferred financing fees | (11,015) | (224,733) |
Total debentures | 12,776,316 | 5,367,715 |
Less current portion | (12,776,316) | (1,615,693) |
Debentures, long term | $ 3,752,022 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Monarch Capital LLC [Member] | ||
Consulting fee | $ 100,000 | |
Alcimede [Member] | ||
Consulting fee | $ 400,000 | $ 400,000 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Fair Value (Details Narrative) | 12 Months Ended | |
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Conversion price percentage | 85.00% | |
Amortization of debt discount | $ 17,558,008 | $ 10,412,324 |
Interest expenses | 8,649,232 | |
Fair value assumptions, measurement input, weighted average remaining term | 2 years 10 months 14 days | |
Deemed dividends | $ 231,800,000 | 53,300,000 |
Gain loss realized on instrument | 15,200,000 | |
Number of common stock issued on conversion | 8,128,044 | 7,306,314 |
Series I-2 Preferred Stock [Member] | ||
Number of common stock issued on conversion | 1,500,000 | |
Level 3 [Member] | ||
Gain loss realized on instrument | $ 15,200,000 | $ 12,400,000 |
Pre-Modification [Member] | ||
Fair value assumptions, measurement input, weighted average remaining term | 3 months 29 days | |
Post-Modification [Member] | ||
Fair value assumptions, measurement input, weighted average remaining term | 7 months 24 days | |
Risk Free Interest Rate [Member] | Minimum [Member] | ||
Fair value assumptions, measurement input, percentages | 0.0247 | |
Risk Free Interest Rate [Member] | Minimum [Member] | Pre-Modification [Member] | ||
Fair value assumptions, measurement input, percentages | 0.0191 | |
Risk Free Interest Rate [Member] | Minimum [Member] | Post-Modification [Member] | ||
Fair value assumptions, measurement input, percentages | 0.0209 | |
Risk Free Interest Rate [Member] | Maximum [Member] | ||
Fair value assumptions, measurement input, percentages | 0.0298 | |
Risk Free Interest Rate [Member] | Maximum [Member] | Pre-Modification [Member] | ||
Fair value assumptions, measurement input, percentages | 0.0232 | |
Risk Free Interest Rate [Member] | Maximum [Member] | Post-Modification [Member] | ||
Fair value assumptions, measurement input, percentages | 0.0256 | |
Volatility [Member] | Minimum [Member] | ||
Fair value assumptions, measurement input, percentages | 1.67 | |
Volatility [Member] | Minimum [Member] | Pre-Modification [Member] | ||
Fair value assumptions, measurement input, percentages | 1.84 | |
Volatility [Member] | Minimum [Member] | Post-Modification [Member] | ||
Fair value assumptions, measurement input, percentages | 2.082 | |
Volatility [Member] | Maximum [Member] | ||
Fair value assumptions, measurement input, percentages | 2.57 | |
Volatility [Member] | Maximum [Member] | Pre-Modification [Member] | ||
Fair value assumptions, measurement input, percentages | 2.963 | |
Volatility [Member] | Maximum [Member] | Post-Modification [Member] | ||
Fair value assumptions, measurement input, percentages | 2.491 | |
Series B Warrant [Member] | ||
Debenture description | The Company extended the exercise period twice, once to March 21, 2019 and the second time to June 21, 2019 | |
Amortization of debt discount | $ 8,600,000 | |
Interest expenses | $ 6,400,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Fair Value - Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Total | $ 350,260 | $ 12,435,250 |
Level 1 [Member] | ||
Total | ||
Level 2 [Member] | ||
Total | ||
Level 3 [Member] | ||
Total | 350,260 | 12,435,250 |
Embedded Conversion Options [Member] | ||
Total | 350,260 | 1,577,025 |
Embedded Conversion Options [Member] | Level 1 [Member] | ||
Total | ||
Embedded Conversion Options [Member] | Level 2 [Member] | ||
Total | ||
Embedded Conversion Options [Member] | Level 3 [Member] | ||
Total | $ 350,260 | 1,577,025 |
Common Stock Warrants [Member] | ||
Total | 10,858,225 | |
Common Stock Warrants [Member] | Level 1 [Member] | ||
Total | ||
Common Stock Warrants [Member] | Level 2 [Member] | ||
Total | ||
Common Stock Warrants [Member] | Level 3 [Member] | ||
Total | $ 10,858,225 |
Derivative Financial Instrume_5
Derivative Financial Instruments and Fair Value - Schedule of Changes in Liabilities with Level 3 of Fair Value (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($) | ||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Balance at December 31, 2017 | $ 12,435,250 | |
Gain on change in fair value of debentures and warrants | (15,167,335) | [1] |
Fair value of warrants exercised | (4,619,150) | |
Fair value of debentures converted | (1,408,901) | |
Fair value of debentures exchanged for Series I-2 Preferred Stock | (1,420) | |
Modification of warrants | 8,603,069 | |
Convertible debt | 508,747 | |
Balance at December 31, 2018 | $ 350,260 | |
[1] | In addition to the gain on change in fair value of debentures and warrants of $15.2 million during the year ended December 31, 2018, the Company recorded a loss on the exchange of convertible debentures into shares of its Series I-2 Preferred Stock of approximately $1.5 million, as more fully discussed in Note 13. |
Derivative Financial Instrume_6
Derivative Financial Instruments and Fair Value - Schedule of Changes in Liabilities with Level 3 of Fair Value (Details) (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Gain loss realized on instrument | $ 15,200,000 | |
Number of common stock issued on conversion | 8,128,044 | $ 7,306,314 |
Series I-2 Preferred Stock [Member] | ||
Number of common stock issued on conversion | $ 1,500,000 |
Capital Lease Obligations (Deta
Capital Lease Obligations (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | ||
Depreciation expense on assets under capital leases | $ 500,000 | $ 1,000,000 |
Minimum rentals and accrued interest | 800,000 | |
Capital lease obligations | $ 31,543 | |
Capital lease obligations due date, description | Due in 2020 | |
Non-cash gain on sale of leased equipment | $ 551,155 |
Capital Lease Obligations - Sch
Capital Lease Obligations - Schedule of Capital Lease Obligations (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Medical equipment | $ 742,745 | $ 4,686,736 |
Less accumulated depreciation | (723,318) | (3,842,443) |
Capital lease obligations | $ 19,427 | $ 844,293 |
Redeemable Preferred Stock (Det
Redeemable Preferred Stock (Details Narrative) - USD ($) | Jul. 16, 2018 | Feb. 09, 2018 | Oct. 30, 2017 | Dec. 31, 2018 | Sep. 18, 2018 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||
September Debenture [Member] | |||||
Principal amount of debt converted into shares | $ 1,741,580 | ||||
Series I-1 Preferred Stock [Member] | |||||
Preferred stock, shares authorized | 4,960 | ||||
Preferred stock, par value | $ 1,000 | ||||
Proceeds from offering | $ 4,960,000 | ||||
Ownership percentage | 50.00% | ||||
Series I-1 Preferred Stock [Member] | Investor [Member] | |||||
Preferred stock, par value | $ 0.80 | ||||
Preferred stock subscription amount | 1 | ||||
Common stock conversion price per share | $ 1 | ||||
Common stock weighted average market price percentage | 85.00% | ||||
Series I-1 Preferred Stock [Member] | Purchase Agreement [Member] | |||||
Proceeds from offering | $ 4,000,000 | ||||
Series I-2 Convertible Preferred Stock [Member] | |||||
Preferred stock, shares authorized | 5,000,000 | ||||
Preferred stock, par value | $ 1 | $ 1,000 | |||
Common stock conversion price per share | $ 1 | ||||
Common stock weighted average market price percentage | 85.00% | ||||
Debenture surrender value | $ 0.80 | ||||
Preferred stock designated shares | 21,346 | ||||
Principal amount of debt converted into shares | $ 1,384,556 | ||||
Number of shares issued for debenture exchange | 1,730.7 | ||||
Series I-2 Preferred Stock [Member] | |||||
Number of shares issued for debenture exchange | 2,176.975 | 1,286.141 | |||
Loss on exchange of stock | $ 1,500,000 | ||||
Number of shares converted | 106,335,991 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Sep. 19, 2019 | Nov. 05, 2018 | Jul. 23, 2018 | Jul. 20, 2018 | Jun. 28, 2018 | Sep. 27, 2017 | Sep. 21, 2017 | Aug. 14, 2017 | Feb. 07, 2017 | Sep. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 18, 2018 | May 09, 2018 |
Common stock par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||
Common stock shares authorized | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | |||||||||||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | ||||||||||||
Preferred stock par value | $ 0.01 | $ 0.01 | ||||||||||||
Conversion of stock into shares | 20,000,000 | |||||||||||||
Number of common stock issued on conversion | $ 8,128,044 | $ 7,306,314 | ||||||||||||
Number of common stock issued, valuie | $ 4,619,150 | |||||||||||||
Common stock shares issued | 128,567,273 | 39,502 | ||||||||||||
Common stock shares outstanding | 128,567,273 | 39,502 | ||||||||||||
Recognized stock stock-based compensation | $ 285,992 | $ 303,046 | ||||||||||||
Reserve stock split, description | 1-for-500 reverse stock split | 1-for-15 reverse stock split | 1-for-30 reverse stock split | |||||||||||
2007 Equity Plan [Member] | ||||||||||||||
Stock option expense | $ 100,000 | 200,000 | ||||||||||||
Weighted average period | 7 years 3 months 19 days | |||||||||||||
Intrinsic value of options exercisable | $ 0 | 0 | ||||||||||||
Remaining stock option expense | $ 34,600 | |||||||||||||
Subsequent Event [Member] | ||||||||||||||
Number of shares converted | 7,380,369,502 | |||||||||||||
Common stock shares outstanding | 7,508,936,775 | |||||||||||||
Reserve stock split, description | Specific ratio ranging up to 1-for-10,000 | |||||||||||||
Restricted Stock [Member] | ||||||||||||||
Recognized stock stock-based compensation | 189,209 | |||||||||||||
Employees and Directors [Member] | ||||||||||||||
Number of restricted stock issued | 364 | |||||||||||||
Recognized stock stock-based compensation | $ 244,768 | |||||||||||||
Employees and Directors [Member] | Restricted Stock [Member] | ||||||||||||||
Number of restricted stock issued | 142,667 | |||||||||||||
Recognized stock stock-based compensation | $ 477,933 | |||||||||||||
Number of restricted stock shares forfeited | 122 | |||||||||||||
Stock issued price per share | $ 3.35 | |||||||||||||
Common Stock [Member] | ||||||||||||||
Common stock shares authorized | 3,000,000,000 | |||||||||||||
Number of shares converted | 106,335,991 | |||||||||||||
Shares converted into debt | 4,221,601 | 36,571 | ||||||||||||
Number of common stock issued on conversion | $ 422 | $ 4 | ||||||||||||
Number of common stock issued | 17,788,579 | |||||||||||||
Number of common stock issued, valuie | $ 1,779 | |||||||||||||
Number of restricted stock issued | 142,667 | 364 | ||||||||||||
Common Stock [Member] | March 2017 Debentures [Member] | ||||||||||||||
Shares converted into debt | 4,221,601 | |||||||||||||
Number of common stock issued on conversion | $ 6,700,000 | |||||||||||||
Common stock shares issued | 17,788,579 | |||||||||||||
Cashless exercise warrants | 106,006,177 | |||||||||||||
Warrants [Member] | ||||||||||||||
Number of warrants isssued as anti-dilution provision | 53,234,923,889 | |||||||||||||
Minimum [Member] | ||||||||||||||
Common stock par value | 0.0001 | |||||||||||||
Maximum [Member] | ||||||||||||||
Common stock par value | $ 0.01 | |||||||||||||
Series G Preferred Stock [Member] | ||||||||||||||
Preferred stock shares authorized | 14,000 | 14,000 | ||||||||||||
Preferred stock par value | $ 0.01 | $ 0.01 | ||||||||||||
Preferred stock shares outstanding | 215 | 215 | ||||||||||||
Preferred stock, stated value | $ 1,000 | |||||||||||||
Weighted average common stock price percentage | 85.00% | |||||||||||||
Shares converted into debt | ||||||||||||||
Number of common stock issued on conversion | ||||||||||||||
Number of common stock issued | ||||||||||||||
Number of common stock issued, valuie | ||||||||||||||
Series H Preferred Stock [Member] | ||||||||||||||
Preferred stock shares authorized | 14,202 | 14,202 | ||||||||||||
Preferred stock par value | $ 0.01 | $ 0.01 | ||||||||||||
Preferred stock shares outstanding | 10 | 60 | ||||||||||||
Preferred stock, stated value | $ 1,000 | |||||||||||||
Weighted average common stock price percentage | 85.00% | |||||||||||||
Number of preferred stock converted | 50 | 7,785 | ||||||||||||
Conversion of stock into shares | 40,000 | 50 | 742 | |||||||||||
Number of shares converted | 40,000 | |||||||||||||
Shares converted into debt | 2,174 | |||||||||||||
Number of common stock issued on conversion | $ 2,200,000 | |||||||||||||
Principal amount of debt converted into shares | $ 2,700,000 | |||||||||||||
Series F Convertible Preferred Stock [Member] | ||||||||||||||
Preferred stock shares outstanding | 1,750,000 | |||||||||||||
Series F Convertible Preferred Stock [Member] | Genomas, Inc [Member] | ||||||||||||||
Conversion of stock into shares | 120 | |||||||||||||
Number of common stock issued | 1,750,000 | |||||||||||||
Number of common stock issued, valuie | $ 174,097 | |||||||||||||
Stock conversion share price | $ 14,625 | |||||||||||||
Preferred stock price per share for unpaid dividend | $ 1.95 | |||||||||||||
Series J Convertible Preferred Stock [Member] | ||||||||||||||
Preferred stock shares outstanding | 250,000 | |||||||||||||
Number of common stock issued | 250,000 | |||||||||||||
Series J Convertible Preferred Stock [Member] | Alcimede LLC [Member] | ||||||||||||||
Preferred stock, stated value | $ 1 | |||||||||||||
Number of common stock issued | 250,000 | |||||||||||||
Number of common stock issued, valuie | $ 250,000 | |||||||||||||
Preferred stock voting rights | Each share of the Series J Preferred Stock had the whole number of votes equal to 24 shares of common stock. With respect to all other matters, and from and after October 1, 2018, each share of the Series J Preferred Stock is entitled to the whole number of votes equal to the number of common shares into which it is then convertible. | |||||||||||||
Cumulative dividends percentage | 8.00% | |||||||||||||
Series J Convertible Preferred Stock [Member] | Alcimede LLC [Member] | Minimum [Member] | ||||||||||||||
Preferred stock shares authorized | 3,000,000,000 | |||||||||||||
Series J Convertible Preferred Stock [Member] | Alcimede LLC [Member] | Maximum [Member] | ||||||||||||||
Preferred stock shares authorized | 10,000,000,000 | |||||||||||||
Series I-2 Preferred Stock [Member] | ||||||||||||||
Number of shares converted | 106,335,991 | |||||||||||||
Number of common stock issued on conversion | $ 1,500,000 | |||||||||||||
Series I-2 Preferred Stock [Member] | Common Stock [Member] | ||||||||||||||
Conversion of stock into shares | 1,286.141 | |||||||||||||
Number of shares converted | 106,335,991 |
Stockholders' Deficit - Summary
Stockholders' Deficit - Summary of Preferred Stock Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Balance | $ (40,613,461) | $ (14,885,896) |
Conversion of Series H Preferred Stock into common stock | 8,128,044 | 7,306,314 |
Issuance of Series F preferred Stock for business acquisition | 174,097 | |
Issuance of Series J Preferred Stock | 4,619,150 | |
Balance | (39,167,864) | (40,613,461) |
Preferred Stock [Member] | ||
Balance | $ 17,502 | $ 102 |
Balance, shares | 1,750,275 | 10,234 |
Conversion of Series H Preferred Stock into common stock | $ (78) | |
Conversion of Series H Preferred Stock into common stock, shares | (50) | (7,785) |
Issuance of Series F preferred Stock for business acquisition | $ 17,500 | |
Issuance of Series F Preferred Stock for business acquisition, shares | 1,750,000 | |
Exchange of Series H Preferred Stock for convertible debentures | $ (22) | |
Exchange of Series H Preferred Stock for convertible debentures, shares | (2,174) | |
Issuance of Series J Preferred Stock | $ 2,500 | |
Issuance of Series J Preferred Stock, shares | 250,000 | |
Balance | $ 20,002 | $ 17,502 |
Balance, shares | 2,000,225 | 1,750,275 |
Series G Preferred Stock [Member] | ||
Balance | $ 2 | $ 2 |
Balance, shares | 215 | 215 |
Conversion of Series H Preferred Stock into common stock | ||
Conversion of Series H Preferred Stock into common stock, shares | ||
Issuance of Series F preferred Stock for business acquisition | ||
Issuance of Series F Preferred Stock for business acquisition, shares | ||
Exchange of Series H Preferred Stock for convertible debentures | ||
Exchange of Series H Preferred Stock for convertible debentures, shares | ||
Issuance of Series J Preferred Stock | ||
Issuance of Series J Preferred Stock, shares | ||
Balance | $ 2 | $ 2 |
Balance, shares | 215 | 215 |
Series H Preferred Stock [Member] | ||
Balance | $ 0 | $ 100 |
Balance, shares | 60 | 10,019 |
Conversion of Series H Preferred Stock into common stock | $ (78) | |
Conversion of Series H Preferred Stock into common stock, shares | (50) | (7,785) |
Issuance of Series F preferred Stock for business acquisition | ||
Issuance of Series F Preferred Stock for business acquisition, shares | ||
Exchange of Series H Preferred Stock for convertible debentures | $ (22) | |
Exchange of Series H Preferred Stock for convertible debentures, shares | (2,174) | |
Issuance of Series J Preferred Stock | ||
Issuance of Series J Preferred Stock, shares | ||
Balance | $ 0 | |
Balance, shares | 10 | 60 |
Series F Preferred Stock [Member] | ||
Balance | $ 17,500 | |
Balance, shares | 1,750,000 | |
Conversion of Series H Preferred Stock into common stock | ||
Conversion of Series H Preferred Stock into common stock, shares | ||
Issuance of Series F preferred Stock for business acquisition | $ 17,500 | |
Issuance of Series F Preferred Stock for business acquisition, shares | 1,750,000 | |
Exchange of Series H Preferred Stock for convertible debentures | ||
Exchange of Series H Preferred Stock for convertible debentures, shares | ||
Issuance of Series J Preferred Stock | ||
Issuance of Series J Preferred Stock, shares | ||
Balance | $ 17,500 | $ 17,500 |
Balance, shares | 1,750,000 | 1,750,000 |
Series J Preferred Stock [Member] | ||
Balance | ||
Balance, shares | ||
Conversion of Series H Preferred Stock into common stock | ||
Conversion of Series H Preferred Stock into common stock, shares | ||
Issuance of Series F preferred Stock for business acquisition | ||
Issuance of Series F Preferred Stock for business acquisition, shares | ||
Exchange of Series H Preferred Stock for convertible debentures | ||
Exchange of Series H Preferred Stock for convertible debentures, shares | ||
Issuance of Series J Preferred Stock | $ 2,500 | |
Issuance of Series J Preferred Stock, shares | 250,000 | |
Balance | $ 2,500 | |
Balance, shares | 250,000 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Stock Option Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | ||
Number of Options Outstanding, beginning balance | 77 | 95 |
Number of Options Granted | ||
Number of Options Expired | ||
Number of Options Forfeited | (18) | |
Number of Options Options Outstanding, ending balance | 77 | 77 |
Number of Options Options Exercisable | 68 | |
Weighted average exercise price, Outstanding beginning | $ 1,035,374 | $ 970,725 |
Weighted average exercise price, Granted | ||
Weighted average exercise price, Expired | ||
Weighted average exercise price, Forfeited | ||
Weighted average exercise price, Outstanding, ending balance | 1,036,374 | $ 1,035,374 |
Weighted average exercise price, Exercisable | $ 1,152,616 | |
Weighted average contractual term (Yrs.), beginning | 8 years 3 months 29 days | 8 years 11 months 4 days |
Weighted average contractual term (Yrs.), ending | 7 years 3 months 29 days | 8 years 3 months 29 days |
Stockholders' Deficit - Sched_2
Stockholders' Deficit - Schedule of Stock Option Outstanding and Exercisable (Details) | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Options outstanding, Number outstanding | shares | 77 |
Options outstanding, Weighted average exercise | $ / shares | $ 1,036,374 |
Options outstanding, Aggregate intrinsic value | $ | |
Options vested and exercisable, Number vested | shares | 68 |
Options vested and exercisable Weighted average exercise price | $ / shares | $ 1,152,616 |
Options vested and exercisable Aggregate intrinsic value | $ | |
Exercise Price Range One [Member] | |
Options outstanding, Exercise price | $ / shares | $ 2,250,500 |
Options outstanding, Number outstanding | shares | 22 |
Options outstanding, Weighted average remaining contractual life (years) | 7 years 2 months 30 days |
Options outstanding, Aggregate intrinsic value | $ | |
Options vested and exercisable, Number vested | shares | 22 |
Options vested and exercisable Weighted average exercise price | $ / shares | $ 2,250,500 |
Options vested and exercisable Aggregate intrinsic value | $ | |
Exercise Price Range Two [Member] | |
Options outstanding, Exercise price | $ / shares | $ 1,125,500 |
Options outstanding, Number outstanding | shares | 22 |
Options outstanding, Weighted average remaining contractual life (years) | 7 years 2 months 30 days |
Options outstanding, Aggregate intrinsic value | $ | |
Options vested and exercisable, Number vested | shares | 22 |
Options vested and exercisable Weighted average exercise price | $ / shares | $ 1,125,500 |
Options vested and exercisable Aggregate intrinsic value | $ | |
Exercise Price Range Three [Member] | |
Options outstanding, Exercise price | $ / shares | $ 225,000 |
Options outstanding, Number outstanding | shares | 16 |
Options outstanding, Weighted average remaining contractual life (years) | 7 years 3 months 29 days |
Options outstanding, Aggregate intrinsic value | $ | |
Options vested and exercisable, Number vested | shares | 12 |
Options vested and exercisable Weighted average exercise price | $ / shares | $ 225,000 |
Options vested and exercisable Aggregate intrinsic value | $ | |
Exercise Price Range Four [Member] | |
Options outstanding, Exercise price | $ / shares | $ 67,500 |
Options outstanding, Number outstanding | shares | 15 |
Options outstanding, Weighted average remaining contractual life (years) | 7 years 6 months 14 days |
Options outstanding, Aggregate intrinsic value | $ | |
Options vested and exercisable, Number vested | shares | 12 |
Options vested and exercisable Weighted average exercise price | $ / shares | $ 67,500 |
Options vested and exercisable Aggregate intrinsic value | $ |
Stockholders' Deficit - Sched_3
Stockholders' Deficit - Schedule of Warrants Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | ||
Warrants outstanding, beginning balance | 4,352,806 | 188 |
Warrants outstanding, Increase in warrants during the period as a result of down round provisions | 53,234,923,889 | 4,353,957 |
Warrants exchanged during the period | (13) | |
March Warrants expired during the period | (2,760,079) | |
March Warrants exercised during the period | (106,006,177) | (1,326) |
Warrants outstanding, ending balance | 53,130,510,439 | 4,352,806 |
Weighted average exercise price, warrants outstanding, beginning balance | $ 22.1782 | $ 87,750 |
Weighted average exercise price, Increase in warrants during the period as a result of down round provisions | 18.8119 | |
Weighted average exercise price, Warrants exchanged during the period | (93,525) | |
Weighted average exercise price, March Warrants expired during the period | (0.1700) | |
Weighted average exercise price, March Warrants exercised during the period | (0.0419) | 482.3643 |
Weighted average exercise price, warrants outstanding, ending balance | $ 0.0017 | $ 22.1782 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | Dec. 22, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Corporate tax rate | 5.97% | 2.00% | ||
Deferred tax assets valuation allowance | $ (22,340,179) | $ (7,381,633) | ||
Net operating loss carryforwards | $ 93,400,000 | $ 93,400,000 | $ 93,400,000 | |
State net operating loss carryforwards expiration description | Begin to expire in 2031 | |||
Tax Cuts and Jobs Act [Member] | ||||
Income tax reconciliation description | The TCJA includes a number of provisions impacting us, including the lowering of the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018 and 100% bonus depreciation for qualifying capital expenditures acquired and placed into service after September 27, 2017, among others. | |||
Corporate tax rate | 21.00% |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax (Expense) Benefit (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Current, Federal | $ 766,070 | $ 1,015,724 |
Current, State | ||
Total, Current | 766,070 | 1,015,724 |
Deferred, Federal | ||
Deferred, State | ||
Total, Deferred | ||
Provision for income taxes | $ (766,070) | $ (1,015,724) |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21.00% | 34.00% |
Permanent and other items | (5.81%) | (0.06%) |
Beneficial conversion feature | 0.00% | (20.05%) |
Federal income taxes audit and other adjustments | 93.55% | 0.00% |
Rate change | 0.00% | (10.40%) |
Change in valuation allowance | (102.77%) | (1.49%) |
Effective income tax rate | 5.97% | 2.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Amortization | $ 914,520 | $ 978,688 |
Net operating loss carryforward | 19,567,649 | 5,244,000 |
Goodwill and intangible assets | (112,742) | |
Allowance for doubtful accounts | 703,873 | 259,110 |
Charitable contributions | 593 | 618 |
Stock options | 936,641 | 700,745 |
Accrued liabilities | 390,041 | 121,993 |
Business interest expense | 989,408 | |
Deferred state tax asset | 1,139,059 | 595,531 |
Total deferred income tax assets | 24,641,784 | 7,787,943 |
Depreciation | (2,301,605) | (406,310) |
Total deferred income tax liabilities | (406,310) | |
Deferred tax asset, net | 22,340,179 | 7,381,633 |
Less: valuation allowance | (22,340,179) | (7,381,633) |
Net deferred tax assets |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | Sep. 13, 2018 | Feb. 15, 2017 | Feb. 08, 2017 | Jan. 24, 2017 | Jan. 03, 2017 | Dec. 31, 2016 | Sep. 27, 2016 | Aug. 31, 2019 | Jul. 31, 2019 | May 31, 2019 | Feb. 28, 2019 | Nov. 30, 2017 | Feb. 28, 2017 | Jan. 31, 2017 | Feb. 29, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 19, 2019 | Mar. 24, 2017 | Dec. 07, 2016 | Nov. 03, 2016 | Oct. 31, 2016 | Sep. 30, 2016 | Jul. 29, 2016 | Mar. 31, 2016 |
Lease expiration description | Expire through 2021 | ||||||||||||||||||||||||
Rent expense | $ 60,000 | $ 90,000 | |||||||||||||||||||||||
Equiment lease outstanding balance | $ 341,612 | ||||||||||||||||||||||||
Accrued interest | 200,000 | $ 43,000 | $ 43,000 | ||||||||||||||||||||||
Mr Diamantis [Member] | |||||||||||||||||||||||||
Due to related party | $ 9,900,000 | ||||||||||||||||||||||||
Florida Department of Revenue [Member] | |||||||||||||||||||||||||
Settlement payable | $ 390,000 | ||||||||||||||||||||||||
Income tax penalties and interest paid | 443,000 | ||||||||||||||||||||||||
Income tax penalties and interest accrued | $ 900,000 | ||||||||||||||||||||||||
Due to related party | 460,089 | ||||||||||||||||||||||||
TCS-Florida, L.P [Member] | |||||||||||||||||||||||||
Due to related party | 300,000 | ||||||||||||||||||||||||
Litigation settlement in judgment | $ 2,600,000 | ||||||||||||||||||||||||
Payment in settlement of judgment | $ 700,000 | $ 700,000 | |||||||||||||||||||||||
DeLage Landen Financial Services, Inc. [Member] | |||||||||||||||||||||||||
Litigation settlement in judgment | $ 1,000,000 | ||||||||||||||||||||||||
Implicit interest rate | 4.97% | ||||||||||||||||||||||||
Equiment lease outstanding balance | 200,000 | ||||||||||||||||||||||||
Epinex Diagnostics Laboratories, Inc. [Member] | |||||||||||||||||||||||||
Payment of attorneys' fees | $ 300,000 | $ 700,000 | |||||||||||||||||||||||
Medytox Solutions, Inc [Member] | |||||||||||||||||||||||||
Discharge of payment | 2,030,000 | ||||||||||||||||||||||||
Medytox Solutions, Inc [Member] | Forecast [Member] | |||||||||||||||||||||||||
Amount awarded to other party in judgement | $ 413,000 | ||||||||||||||||||||||||
Medytox Solutions, Inc [Member] | Internal Revenue Service (IRS) [Member] | |||||||||||||||||||||||||
Settlement payable | $ 100,000 | ||||||||||||||||||||||||
Income tax penalties and interest paid | $ 5,000,000 | ||||||||||||||||||||||||
Income tax liability refund | $ 1,900,000 | ||||||||||||||||||||||||
Provision for liability | $ 1,000,000 | ||||||||||||||||||||||||
Commitments receivables | $ 600,000 | ||||||||||||||||||||||||
Genomas, Inc. [Member] | |||||||||||||||||||||||||
Payment for notes payable | $ 200,000 | ||||||||||||||||||||||||
Discharge of payment | $ 120,000 | ||||||||||||||||||||||||
EPIC Reference Laboratories, Inc. [Member] | |||||||||||||||||||||||||
Discharge of payment | $ 148,000 | ||||||||||||||||||||||||
EPIC Reference Laboratories, Inc. [Member] | Forecast [Member] | |||||||||||||||||||||||||
Litigation settlement in judgment | $ 155,000 | ||||||||||||||||||||||||
Roche Diagnostics Corporation [Member] | Forecast [Member] | |||||||||||||||||||||||||
Discharge of payment | $ 240,000 | ||||||||||||||||||||||||
Beckman Coulter, Inc [Member] | Forecast [Member] | |||||||||||||||||||||||||
Discharge of payment | $ 106,000 | ||||||||||||||||||||||||
Techlogix, Inc [Member] | Forecast [Member] | |||||||||||||||||||||||||
Amount awarded to other party in judgement | $ 72,000 | ||||||||||||||||||||||||
Settlement Agreement [Member] | Epinex Diagnostics Laboratories, Inc. [Member] | |||||||||||||||||||||||||
Settlement payable | $ 200,000 | ||||||||||||||||||||||||
Forbearance Agreement [Member] | TCS-Florida, L.P [Member] | |||||||||||||||||||||||||
Monthly installment payment | $ 1,900,000 | ||||||||||||||||||||||||
Employment Agreements [Member] | One Former Employee [Member] | |||||||||||||||||||||||||
Litigation settlement in judgment | 253,000 | ||||||||||||||||||||||||
Employment Agreements [Member] | Other Former Employee [Member] | |||||||||||||||||||||||||
Litigation settlement in judgment | $ 110,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 730,665 |
2020 | 31,543 |
Total minimum future lease payments | $ 762,208 |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) | 12 Months Ended |
Dec. 31, 2018Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net revenues - External | $ 14,548,690 | $ 3,088,216 |
(Loss) from operations | (13,224,620) | (16,076,107) |
Depreciation and amortization | 1,263,844 | 1,715,321 |
Capital expenditures | 213,105 | 1,422,002 |
Total assets | 14,199,300 | 6,290,794 |
Clinical Laboratory Operations [Member] | ||
Net revenues - External | 131,014 | 2,210,318 |
(Loss) from operations | (2,247,499) | (4,672,768) |
Depreciation and amortization | 764,445 | 1,639,954 |
Capital expenditures | ||
Total assets | 271,426 | 1,503,520 |
Hospital Operations [Member] | ||
Net revenues - External | 14,417,676 | 877,898 |
(Loss) from operations | (6,434,538) | (4,800,539) |
Depreciation and amortization | 498,352 | 73,985 |
Capital expenditures | 213,105 | 1,422,002 |
Total assets | 13,568,933 | 2,549,504 |
Corporate [Member] | ||
(Loss) from operations | (4,542,583) | (6,602,800) |
Depreciation and amortization | 1,047 | 1,382 |
Total assets | 2,707,416 | 3,436,773 |
Assets of AMSG And HTS Classified as Held for Sale [Member] | ||
Total assets | 152,171 | 255,566 |
Eliminations [Member] | ||
Total assets | $ (2,500,646) | $ (1,454,570) |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) - USD ($) | Sep. 27, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 18, 2018 | Sep. 29, 2016 | Jul. 19, 2016 |
Preferred stock shares designated | 5,000,000 | 5,000,000 | ||||||
Number of common stock issued on conversion | $ 8,128,044 | $ 7,306,314 | ||||||
Series F Preferred Stock [Member] | ||||||||
Preferred stock shares designated | 1,750,000 | 1,750,000 | 1,750,000 | |||||
Preferred stock stated value | $ 1,750,000 | $ 17,500 | $ 17,500 | $ 17,500 | ||||
Convertible terms of conversion feature | The Series F Preferred Stock issued effective September 27, 2017 has an aggregate stated value of $1,750,000, and is convertible into shares of the Company's common stock at any time after the one-year anniversary of the closing date at a conversion price per common share equal to the greater of $14,625 or the average closing sales price of the Company's common stock for the 10 trading days immediately preceding the conversion. | |||||||
Shares converted into debt | ||||||||
Number of common stock issued on conversion | ||||||||
Series F Preferred Stock [Member] | Minimum [Member] | ||||||||
Conversion price per share | $ 14,625 | |||||||
Series F Preferred Stock [Member] | Maximum [Member] | ||||||||
Shares converted into debt | 120 | |||||||
Number of common stock issued on conversion | $ 174,097 | |||||||
Genomas, Inc. [Member] | ||||||||
Due to related party | $ 400,000 | |||||||
Goodwill impairment charge | $ 1,000,000 | |||||||
Genomas, Inc. [Member] | Hartford Healthcare Corporation [Member] | ||||||||
Equity ownership percentage | 15.00% | |||||||
Notes payable | $ 1,500,000 | |||||||
Cash | $ 250,000 | |||||||
Genomas Acquisition [Member] | Advanced Molecular Services Group [Member] | ||||||||
Goodwill impairment charge | $ 914,972 | |||||||
Stock Purchase Agreement [Member] | Genomas, Inc. [Member] | ||||||||
Equity ownership percentage | 85.00% | |||||||
Previously paid amount expensed | $ 1,000,000 | |||||||
Stock Purchase Agreement [Member] | Genomas, Inc. [Member] | Series F Preferred Stock [Member] | ||||||||
Preferred stock shares designated | 1,750,000 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Discontinued Operation of Balance Sheet and Operation Statement (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Cash | $ 6,994 | $ 17,554 | |
Accounts receivable, net | 97,581 | 179,737 | |
Prepaid expenses and other current assets | 35,777 | 29,441 | |
Current assets classified as held for sale | 140,352 | 226,732 | |
Property and equipment, net | 5,790 | 21,078 | |
Deposits | 6,029 | 7,756 | |
Non-current assets classified as held for sale | 11,819 | 28,834 | |
Accounts payable (includes related parties) | 1,079,827 | 1,078,965 | |
Accrued expenses | 939,183 | 644,300 | |
Current portion of notes payable | 278,836 | 249,589 | |
Current liabilities classified as held for sale | 2,297,846 | 1,972,854 | |
Revenue from services | 1,522,485 | 1,933,569 | |
Cost of services | 162,020 | 180,849 | |
Gross profit | 1,360,465 | 1,752,720 | |
Operating expenses | 2,589,316 | 5,927,970 | |
Gain on sale of stock | (800,000) | ||
Other expense | 5,992 | 101,668 | |
Provision for income taxes | |||
Loss from discontinued operations | (434,843) | (4,276,918) | |
Advanced Molecular Services Group [Member] | |||
Revenue from services | 102,991 | 283,460 | |
Cost of services | 38,299 | 12,575 | |
Gross profit | 64,692 | 270,885 | |
Operating expenses | 480,436 | 2,525,110 | |
Gain on sale of stock | (800,000) | ||
Other expense | 1,049 | 46,859 | |
Provision for income taxes | |||
Loss from discontinued operations | 383,207 | (2,301,084) | |
Health Technology Solutions, Inc [Member] | |||
Revenue from services | [1] | 1,419,494 | 1,650,109 |
Cost of services | 123,721 | 168,274 | |
Gross profit | 1,295,773 | 1,481,835 | |
Operating expenses | 2,108,880 | 3,402,860 | |
Other expense | 4,943 | 54,809 | |
Provision for income taxes | |||
Loss from discontinued operations | (818,050) | (1,975,834) | |
Advanced Molecular Services Group [Member] | |||
Cash | 4,471 | 9,273 | |
Accounts receivable, net | 6,838 | 19,022 | |
Prepaid expenses and other current assets | 25,477 | 25,477 | |
Current assets classified as held for sale | 36,786 | 53,772 | |
Property and equipment, net | |||
Deposits | |||
Non-current assets classified as held for sale | |||
Accounts payable (includes related parties) | 532,858 | 671,561 | |
Accrued expenses | 418,932 | 375,165 | |
Current portion of notes payable | 278,836 | 249,589 | |
Current liabilities classified as held for sale | 1,230,626 | 1,296,315 | |
Non-current liabilities classified as held for sale | |||
Health Technology Solutions, Inc [Member] | |||
Cash | 2,523 | 8,281 | |
Accounts receivable, net | 90,743 | 160,715 | |
Prepaid expenses and other current assets | 10,300 | 3,964 | |
Current assets classified as held for sale | 103,566 | 172,960 | |
Property and equipment, net | 5,790 | 21,078 | |
Deposits | 6,029 | 7,756 | |
Non-current assets classified as held for sale | 11,819 | 28,834 | |
Accounts payable (includes related parties) | 546,969 | 407,404 | |
Accrued expenses | 520,251 | 269,135 | |
Current liabilities classified as held for sale | $ 1,067,220 | $ 676,539 | |
[1] | Revenue from services, includes related party revenue of $0.7 million and $0.7 million, respectively |
Discontinued Operations - Sch_2
Discontinued Operations - Schedule of Discontinued Operation of Balance Sheet and Operation Statement (Details) (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Health Technology Solutions, Inc [Member] | ||
Revenue from related party | $ 700,000 | $ 700,000 |
Discontinued Operations - Sch_3
Discontinued Operations - Schedule of Fair Value of Acquired Assets and Liabilities Assumed (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 27, 2017 |
Accounts payable and accrued expenses | $ (193,966) | ||
Genomas Inc [Member] | |||
Cash | $ 7,990 | ||
Accounts receivable, net | 6,503 | ||
Accounts payable and accrued expenses | (458,736) | ||
Deferred revenue | (20,000) | ||
Loans payable short-term | (142,514) | ||
Note payable long-term | (134,118) | ||
Total identifiable net liabilities | (740,875) | ||
Goodwill | 914,972 | ||
Total consideration | $ 174,097 |
Supplemental Disclosure of Ca_3
Supplemental Disclosure of Cash Flow Information - Schedule of Supplemental Cash Flow Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | ||
Cash paid for interest | $ 313,918 | $ 1,200,759 |
Cash paid for income taxes | 23,362 | 541,313 |
Inventory | 450,682 | |
Prepaid and other assets | 310,385 | |
Property and equipment | 7,129,484 | |
Intangible assets | 504,806 | |
Accrued expenses | (193,966) | |
Cashless exercise of warrants | 4,619,150 | |
Exchange of debentures for Series I-2 Preferred Stock | 3,127,556 | |
Note payable and accrued expenses settled through issuance of Series J Preferred Stock | 250,000 | |
Common stock issued for conversion of Series I-2 Preferred Stock | 1,513,105 | |
Beneficial conversion feature | 192,308 | |
Services and severance settled through the issuances of common stock | 161,003 | |
Exchange of convertible debentures for convertible debentures and warrants | 10,734,336 | |
Series F Preferred Stock issued for business acquisition | 174,097 | |
Notes payable and warrants settled through issuance of common stock | 440,000 | |
Convertible debentures issued in exchange for Series H Preferred Stock | 2,695,760 | |
Debentures converted into common stock | 8,128,044 | 7,306,314 |
Deemed dividend for trigger of down round provision feature | 231,843,826 | 53,341,619 |
Conversions of preferred stock into common stock | 7,785,000 | |
Value of convertible liabilities | $ 12,435,250 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details Narrative) - ASU 2016-02 [Member] | Jan. 02, 2018USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating leases, right-of-use assets | $ 500,000 |
Operating leases, liabilities | $ 500,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Oct. 12, 2019 | Sep. 27, 2019USD ($) | Aug. 17, 2019 | Jun. 24, 2019USD ($) | Jun. 13, 2019USD ($) | Jun. 07, 2019USD ($) | Jun. 05, 2019USD ($) | May 12, 2019USD ($) | Mar. 27, 2019USD ($) | Mar. 05, 2019USD ($) | Feb. 24, 2019USD ($) | Mar. 21, 2017USD ($) | Mar. 31, 2019USD ($) | Jun. 24, 2019USD ($) | Sep. 10, 2019USD ($)Integershares | Sep. 19, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 21, 2019USD ($) | Nov. 03, 2016USD ($) |
Net revenues | $ 14,548,690 | $ 3,088,216 | ||||||||||||||||||
Loan payable | 800,000 | |||||||||||||||||||
Debt instrument principal amount | $ 341,612 | |||||||||||||||||||
Proceeds from debt | 9,000,000 | $ 15,742,500 | ||||||||||||||||||
The June 2019 Debentures [Member] | Forecast [Member] | ||||||||||||||||||||
Debt interest rate increasing percentage | 5.00% | |||||||||||||||||||
March Debentures [Member] | ||||||||||||||||||||
Debt instrument principal amount | $ 1,984,000 | |||||||||||||||||||
Debt instrument maturity date | Mar. 21, 2019 | |||||||||||||||||||
Debt instrument default interest rate | 18.00% | |||||||||||||||||||
Debentures [Member] | ||||||||||||||||||||
Debt instrument principal amount | $ 17,050,000 | |||||||||||||||||||
Debt instrument maturity date | Sep. 19, 2019 | |||||||||||||||||||
Debt instrument default interest rate | 18.00% | |||||||||||||||||||
Default penalty amount | $ 5,100,000 | |||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||
Number of shares converted | shares | 7,380,369,502 | |||||||||||||||||||
Subsequent Event [Member] | Series B Warrants [Member] | ||||||||||||||||||||
Warrants expiration, description | The expiration date of the Series B warrants issued in March 2017 and September 2017 were extended from June 2019 to September 2019. | |||||||||||||||||||
Subsequent Event [Member] | Warrants [Member] | ||||||||||||||||||||
Warrants expiration, date | Mar. 31, 2022 | |||||||||||||||||||
Fair value of warrants | $ 9,500,000 | |||||||||||||||||||
Subsequent Event [Member] | 2019 Debenture Offerings [Member] | ||||||||||||||||||||
Proceeds from debt | $ 3,800,000 | |||||||||||||||||||
Subsequent Event [Member] | The June 2019 Debentures [Member] | ||||||||||||||||||||
Debt interest rate per month | 2.50% | |||||||||||||||||||
Debt instrument, interest rate terms | All overdue accrued and unpaid interest shall entail a late fee equal to the lesser of 24% per annum or the maximum rate permitted by applicable law. | |||||||||||||||||||
Subsequent Event [Member] | March Debentures [Member] | ||||||||||||||||||||
Default penalty amount | $ 600,000 | |||||||||||||||||||
Subsequent Event [Member] | Accounts Receivable Factoring Arrangements [Member] | ||||||||||||||||||||
Number of accounts receivable factoring arrangement | Integer | 5 | |||||||||||||||||||
Accounts receivable sold on non-recourse basis | $ 3,900,000 | |||||||||||||||||||
Non-recourse debt purchase price | 2,700,000 | |||||||||||||||||||
Origination fees, amount | 100,000 | |||||||||||||||||||
Non-recourse debt outstanding amount | $ 1,700,000 | |||||||||||||||||||
Subsequent Event [Member] | JChristopher Diamantis [Member] | 2019 Debenture Offerings [Member] | ||||||||||||||||||||
Debt instrument principal amount | $ 200,000 | $ 125,000 | $ 500,000 | $ 300,000 | $ 300,000 | |||||||||||||||
Debt instrument maturity date | Jul. 20, 2019 | Jul. 20, 2019 | Jun. 3, 2019 | Jun. 3, 2019 | Jun. 3, 2019 | |||||||||||||||
Subsequent Event [Member] | JChristopher Diamantis [Member] | Prepaid Forward Purchase Contract [Member] | ||||||||||||||||||||
Due to related parties | $ 9,900,000 | |||||||||||||||||||
Loan payable | 6,500,000 | |||||||||||||||||||
Payment for fees and expenses incurred | 1,900,000 | |||||||||||||||||||
Incurred interest | 1,500,000 | |||||||||||||||||||
Repayments of accrued interest | 1,500,000 | |||||||||||||||||||
Subsequent Event [Member] | Institutional Investors [Member] | Bridge Debenture Agreement [Member] | 2019 Debenture Offerings [Member] | ||||||||||||||||||||
Debt instrument principal amount | $ 1,250,000 | |||||||||||||||||||
Proceeds from debt | 1,250,000 | |||||||||||||||||||
Subsequent Event [Member] | Investors [Member] | 2019 Debenture Offerings [Member] | ||||||||||||||||||||
Debt instrument principal amount | $ 1,020,000 | $ 1,020,000 | $ 250,000 | |||||||||||||||||
Subsequent Event [Member] | Investors [Member] | June 21,2019 and June 24, 2019 Debenture Offerings [Member] | ||||||||||||||||||||
Proceeds from debt | $ 1,270,000 | |||||||||||||||||||
Subsequent Event [Member] | Investors [Member] | June 13 Agreement [Member] | 2019 Debenture Offerings [Member] | ||||||||||||||||||||
Debt instrument principal amount | $ 1,250,000 | |||||||||||||||||||
Debt instrument maturity date, description | Under the June 13 Agreement, the maturity date of the debentures issued on February 24, 2019, March 27, 2019, May 12, 2019, June 5, 2019 and June 7, 2019 were extended to December 31, 2019 and the terms were changed such that they have the same interest terms as contained in the June 13, 2019 debentures | |||||||||||||||||||
Subsequent Event [Member] | Lender [Member] | Promissoy Note [Member] | ||||||||||||||||||||
Debt instrument principal amount | $ 1,900,000 | |||||||||||||||||||
Proceeds from debt | 1,600,000 | |||||||||||||||||||
Periodic principal paymnent | $ 1,000,000 | |||||||||||||||||||
Due date | Nov. 8, 2019 | |||||||||||||||||||
Remaining periodic principal paymnent | $ 900,000 | |||||||||||||||||||
Remaining periodic principal paymnent, due date | Dec. 26, 2019 | |||||||||||||||||||
Subsequent Event [Member] | Jellico Community Hospital and CarePlus Center [Member] | JChristopher Diamantis [Member] | ||||||||||||||||||||
Business acquisition purchase price | $ 658,537 | |||||||||||||||||||
Diligence, legal and other costs | 250,000 | |||||||||||||||||||
Cost of acquisition | 908,000 | |||||||||||||||||||
Subsequent Event [Member] | Jellico Community Hospital and CarePlus Center [Member] | Government Payors [Member] | ||||||||||||||||||||
Net revenues | $ 12,000,000 | |||||||||||||||||||
Percentage for annual net revenues | 70.00% | |||||||||||||||||||
Subsequent Event [Member] | Jellico Community Hospital [Member] | JChristopher Diamantis [Member] | Prepaid Forward Purchase Contract [Member] | ||||||||||||||||||||
Business acquisition purchase price | $ 700,000 |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Dilutive Effect of Potential Common Shares (Details) - shares | 8 Months Ended | 12 Months Ended | |
Sep. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Common shares outstanding | 128,567,273 | 39,502 | |
Dilutive potential shares | 63,174,170,106 | 5,366,285 | |
Warrants [Member] | |||
Dilutive potential shares | 53,130,510,439 | 4,352,806 | |
Convertible Preferred Stock [Member] | |||
Dilutive potential shares | 7,863,880,588 | 359,563 | |
Subsequent Event [Member] | |||
Common shares outstanding | 7,508,936,775 | ||
Total dilutive potential common shares, including outstanding common stock | 756,396,475,777 | ||
Subsequent Event [Member] | Stock Options [Member] | |||
Dilutive potential shares | 77 | ||
Subsequent Event [Member] | Warrants [Member] | |||
Dilutive potential shares | 634,525,355,377 | ||
Subsequent Event [Member] | Convertible Debt [Member] | |||
Dilutive potential shares | 30,570,395,193 | ||
Subsequent Event [Member] | Convertible Preferred Stock [Member] | |||
Dilutive potential shares | 83,791,788,355 |